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Corporate governance and financial performance in an Australian context

Author

Listed:
  • Rebecca Brown

    (Treasury, Government of Australia)

  • Tue Gørgens

    (Research School of Social Sciences, Australian National University)

Abstract

The concept of corporate governance has attracted considerable attention, domestically and internationally, in recent years. Previous research, largely conducted using international data, has suggested that better governed firms outperform poorer governed firms in a number of key areas. This paper examines the relationship between a company’s adoption of the Australian Securities Exchange (ASX) Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations (ASX Corporate Governance Principles) and its financial performance in the areas of shareholder performance, operating performance and one year sales growth for the top 300 Australian listed companies. Our results suggest that companies demonstrating greater compliance with the ASX Corporate Governance Principles outperform less compliant companies in each of these three financial areas.

Suggested Citation

  • Rebecca Brown & Tue Gørgens, 2009. "Corporate governance and financial performance in an Australian context," Treasury Working Papers 2009-02, The Treasury, Australian Government, revised Mar 2009.
    • Handle: RePEc:tsy:wpaper:wpaper_tsy_wp_2009_2
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    Cited by:

    1. Kathleen Herbohn & Julie Walker & Huay Yien Monica Loo, 2014. "Corporate Social Responsibility: The Link Between Sustainability Disclosure and Sustainability Performance," Abacus, Accounting Foundation, University of Sydney, vol. 50(4), pages 422-459, December.

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    More about this item

    Keywords

    corporate governance; financial performance; ASX;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G00 - Financial Economics - - General - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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