Applying Polynomial Regression Modeling to Highlight the Relation Between Corporate Governance Characteristics and Performance

The entities that carry out their activity in today's business environment, characterized to a great extent by uncertainty, are constantly facing new challenges. Whether they react to external stimuli or global pandemics, to new technologies or anticipate new trends, their ability to change or to be reactive or proactive is tested every day. In order to achieve performance and to ensure a sustainable development through an effective governance, the Corporate Governance Code provides support. In this context, the purpose of our research was to investigate the influence of corporate governance attributes on performance. Hence, the research question of our study aimed to determine the extent to which: (1) board size, (2) the number of non-executive directors, (3) CEO duality, (4) companies size, (5) gender diversity, (6) the existence of the audit committee, and (7) the qualified opinion expressed by the external auditor influenced firm performance measured through market capitalization indicator. We included in our study 102 entities, listed on two stock markets, namely Bucharest Stock Exchange (BSE) and ATHEX from two countries, namely Romania and Greece that registered in 2019 the highest growth from the European Union, taking into account the evolution of markets from 87 countries with available data. The econometric model developed in our study reflects the fact that non-executive directors, companies size and board sizes influenced performance measured through market capitalization indicator.