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Yoke of corporate governance and firm performance: A study of listed firms in Pakistan

Author

Listed:
  • Amjad Ali

    (European School of Administration and Management, France; Lahore School of Accountancy and Finance, University of Lahore City Campus, Lahore, Pakistan)

  • Wajid Alim

    (Lahore School of Accountancy and Finance, University of Lahore City Campus, Lahore, Pakistan)

  • Jawad Ahmed

    (Lahore School of Accountancy and Finance, University of Lahore City Campus, Lahore, Pakistan)

  • Sabahat Nisar

    (Lahore School of Accountancy and Finance, University of Lahore City Campus, Lahore, Pakistan)

Abstract

Purpose: The objective of this exploration is to show the relation among corporate governance tools (board size, board independence, CEO status, Board Education, and Established Years of the firm) and firm performance which is determined by return on asset (ROA). Methodology: Quantitative data are used to discover the association between the variables. The top 75 companies registered on the Pakistan Stock Exchange involving the period from 2010 to 2019 are taken as a sample. Findings: The research found that there is a connection between performance of the firm with the overall extent of directors, board independence, and average education of board representatives. Insignificant results came for CEO duality and established years of the firm. The result predicted that an increase in total board members and average education of board members will increase firm performance (ROA), whereas a reduction in board independence will reduce firm performance (ROA) which explains the importance of corporate governance for the success of a firm performance. Originality of the Study: Unlike the previous studies, this study tried to find a long-term influence of corporate governance on firm performance by analyzing five different variables for the listed firms of Pakistan. Implication of the Study: The study provides the importance of corporate governance tools and their effectiveness for the success of the organizations, especially in Pakistan.

Suggested Citation

  • Amjad Ali & Wajid Alim & Jawad Ahmed & Sabahat Nisar, 2022. "Yoke of corporate governance and firm performance: A study of listed firms in Pakistan," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 13(1), pages 08-17, January.
    • Handle: RePEc:aii:ijcmss:v:13:y:2022:i:1:p:08-17
    DOI: 10.18843/ijcms/v13i1/02
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    More about this item

    Keywords

    Board education; board independence; board size; CEO duality; corporate governance; firm performance; Pakistan; return on asset;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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