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The Impact of Corporate Governance on the Financial Performance of a Firm (A DuPont Analysis)

Author(s)

Hasan Raza ,

Download Full PDF Pages: 23-33 | Views: 1010 | Downloads: 314 | DOI: 10.5281/zenodo.3491431

Volume 8 - February 2019 (02)

Abstract

The purpose of this study is to identify a quantitative relationship between corporate governance and firm’s financial performance, or financial outcomes. Extensive literature was sought to determine the most significant corporate governance factors impacting the financial performance of firms. For this research, authors studied three factors namely (i) size of a firm’s board (ii) the number of women members on board and (iii) the duality of a firm’s CEO.  Statistical techniques were used to present financial outcomes of 9 listed pharmaceutical firms trading over the period from 2011 to 2015 in Pakistan Stock exchange. The research findings indicate that corporate governance factors like board size, number of women board members and duality of CEO holds a negative relationship with financial metrics like return on equity (ROE).

Keywords

Corporate Governance, Firm Performance, Listed Firms in Pakistan, Return on Equity

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