Analysis of the Relationship Between Corporate Governance Mechanisms and Performance of A Firm: A Study on Pakistan’s Chemical Industry

Authors

  • Abid Rasheed
  • Ahmed Arman, Ch.Abdullah Imran Sahi
  • Ghulam Mustafa, Bilal Sarwar

Keywords:

Corporate governance, Agency cost, firm performance, ROE, Profit margin

Abstract

Corporate governance is one of the major topics under discussion from the last two decades. The knowledge is increasing with every passing day as new scandal keeps appearing in the financial world and so are the weaknesses in the CG mechanisms. This study aims to find a relationship between two major elements of CG mechanisms including (board size & composition and audit committee) and firm performance (ROE and profit margin). The sample size consists of 33 chemical companies listed on the Karachi stock exchange from 2005 to 2015. The results show a positive relationship between the variables tested in the study. The results also confirm that the theoretical notion of firms with good financial results and performance are those with better corporate governance practices.

Author Biographies

Abid Rasheed

Business School, University of Central Punjab, Pakistan

 

Ahmed Arman, Ch.Abdullah Imran Sahi

Lecturer, University of Lahore, Pakistan

Ghulam Mustafa, Bilal Sarwar

Business School, University of Central Punjab, Pakistan

 

Published

2020-06-15

Issue

Section

Articles