CORPORATE GOVERNANCE AS THE CATALYST FOR FIRM PERFORMANCE: A CONTEMPORARY CASE STUDY OF INDIAN NIFTY-50 COMPANIES
Corporate governance signifies the set of principles, process and systems by means of which a form is directed, controlled and governed. It signifies different regulations and practices to be followed by companies to ensure transparency and optimal processes so as to achieve higher productivity. Examining the impact of various corporate governance parameters on the performance of a company can be vital to identify various key policies to assure investment security of the stakeholders. With this motivation, in this paper the impact of various corporate governance parameters on firm performance of the NIFTY-50 companies has been investigated. In this paper, an empirical study has been performed where different corporate governance variables has been examined to have impact on firm performance. The presented study has revealed that the corporate governance variables such as board of directors, audit committee, subsidiary companies, corporate governance, CEO/CFO certification and compliance, remuneration committee, nomination committee, board independence, CEO duality etc have positive relation with the firm performance. The Corporate Governance score was found to be positive and statistically significant with the performance parameter, Tobin’s q, return on investment, return on assets and market value by book value etc. in addition, return on equity is found negatively correlated with the market capitalization. The payout ratio has been found positive and statistically significant. Interestingly, in this study it has been observed that the subsidiary companies and compliance are neither positive nor statistically significant to have impact on firm performance. The obtained results and their respective significances could be of paramount significance for business houses, as well as stakeholders to make optimal business decisions.
KEYWORDS— Corporate Governance, Indian Economy, Case study, NIFTY-50 companies, firm performance.