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ISSN : 2765-6934
The Effect of Corporate Governance Practices on Firm Performance: Evidence from Pakistan
Ashfaq U. Rehman (Department of Political Science, University of Pes)
Muhammad Waqas (Department of Management Sciences, Globa)
Abstract
Purpose – The purpose of this study is to investigate the effect of corporate governance practices such as (board size, board composition, CEO duality and audit committee) on the performance of selected Pakistani firms. Research design, data, and methodology – This study examines corporate governance structure by using the data of 80 non-financial firms listed on Karachi Stock Exchange Pakistan during 2010-2014. Hypotheses of the study were tested by using both descriptive and inferential statistics. Result – The findings indicate that board size and audit committee is positively related to the firm performance (ROA & ROE). In contrast, board composition and CEO duality are negatively related to the firm performance (ROA & ROE). As far as controlling variables is concerned, leverage is negative, whereas firm size is positively related to all measures of performance. Conclusions – Empirical findings concluded that corporate governance practices affect the firm performance. Therefore, it is suggested that managers should understand the governance mechanisms to work more efficiently in the firm.
- keywords
- Corporate Governance Practices, Firm Performance (ROA & ROE), Pakistani Firms.
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