Corporate Governance and Firm Performance

International Conference on Sociality and Economics Development (ICSED 2011), Kuala Lumpur, Malaysia, June 17-19, 2011, International Proceedings of Economics Development and Research (IPEDR) vol.10, International Association of Computer Science and Information Technology Press (IACSIT Press), Singa

6 Pages Posted: 4 May 2013

See all articles by Masood Fooladi

Masood Fooladi

Islamic Azad University, Mobarakeh Branch

Ghodratollah Nikzad Chaleshtori

islamic azad university

Date Written: June 18, 2011

Abstract

Based on agency theory, the importance of Corporate Governance (CG) is to reduce agency conflicts between those who control and those who own the residual claims in a firm. In other words, CG as a mechanism helps to align management's goals with those of the stakeholders that are to increase firm performance. Since, the value creation of CG can be measured through the firm performance; the aim of this study is to answer this question: ''is there any relationship between CG and firm performance?'' Therefore, the four board characteristics that are of interest in this study are board independency, CEO duality, ownership structure, and board size. Based on a randomly selected sample of companies listed on Bursa Malaysia and applying the linear multiple regression as the underlying statistical tests, it is found that CEO duality has a negative relationship with firm performance (Return on Equity and Return on Asset) but there is no significant relationship between board independency, board size and ownership structure as independent variables and firm performance as dependent variable.

Keywords: corporate governance, board of directors, firm performance

JEL Classification: G34

Suggested Citation

Fooladi, Masood and Nikzad Chaleshtori, Ghodratollah, Corporate Governance and Firm Performance (June 18, 2011). International Conference on Sociality and Economics Development (ICSED 2011), Kuala Lumpur, Malaysia, June 17-19, 2011, International Proceedings of Economics Development and Research (IPEDR) vol.10, International Association of Computer Science and Information Technology Press (IACSIT Press), Singa. Available at SSRN: https://ssrn.com/abstract=2259541

Masood Fooladi (Contact Author)

Islamic Azad University, Mobarakeh Branch ( email )

Department of Accounting
Mobarakeh Branch
Mobarakeh, Isfahan
Iran

Ghodratollah Nikzad Chaleshtori

islamic azad university ( email )

Tehran
Iran

Register to save articles to
your library

Register

Paper statistics

Downloads
1,797
rank
8,390
Abstract Views
11,013
PlumX Metrics