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Audit Committee, Corporate Governance and Firm Performance: Empirical Evidence from India

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  • Nidhi Bansal
  • Anil K. Sharma

Abstract

Considering the endorsement of Indian Companies Act (2013), the study examines the role of audit committee characteristics (independence and frequency of meetings) in addition with other components of corporate governance (duality, promoter shareholding, board composition, and board size) in improving firm performance. Fixed effect panel data regression was applied on 235 non-financial public limited companies listed in NSE 500. The time period considered was ten years (2004 to 2013). Return on Assets, Return on Equity, Tobin¡¯s q and Market Capitalization were used as proxy of firm performance. Results reveal significant positive association of board size and CEO-Chairman dual role with firm performance. However, findings did not reveal any additional effect of audit committee independence and its meeting frequency on the financial performance of Indian firms. Regulators and policy makers may reexamine the significance of greater independence of board and audit committee in context of firm performance.

Suggested Citation

  • Nidhi Bansal & Anil K. Sharma, 2016. "Audit Committee, Corporate Governance and Firm Performance: Empirical Evidence from India," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(3), pages 103-116, March.
    • Handle: RePEc:ibn:ijefaa:v:8:y:2016:i:3:p:103-116
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    18. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, June.
    19. Sutrisno, Sutrisno, 2023. "Effects of CEO Duality, Board Independence, Ownership Concentration, Company Age on Profit Persistence and Firm Value: An Empirical Study of Manufacturing Companies in West Java, Indonesia," OSF Preprints dzvf8, Center for Open Science.
    20. Udeh, Francis Nnoli & Abiahu, Mary-Fidelis Chidoziem & Tambou, Liberty Ejomafuvwe, 2017. "Impact of Corporate Governance on Firms Financial Performance: A Study of Quoted Banks in Nigeria," MPRA Paper 94923, University Library of Munich, Germany, revised 07 Jul 2019.
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    23. Helmi A. Boshnak, 2021. "Corporate Governance Mechanisms and Firm Performance in Saudi Arabia," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(3), pages 446-465, May.
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    More about this item

    Keywords

    audit committee; board characteristics; companies act (2013); corporate governance; India;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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