Corporate governance and financial performance: evidence from ghanaian manufacturing industry
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Date
2023
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KNUST
Abstract
Corporate success and sustainability depend on several factors aside factors like efficiency, innovation and quality management of internal activities. Corporate governance plays the most essential role in promoting business performance and sustainability since corporate laws are only meant for operational efficiency and transparency. Corporate governance controls operational activities, reduces errors in a firm and integrate organizational members towards effectiveness and consistency. Managers are expected to promote compliance among members within the firm so that performance can be enhanced through efficiency, consistency and effectiveness. The main objective of this study is to assess the impact of corporate governance on financial performance of Ghanaian manufacturing companies. With a specific focus on assessing size of the board, independence of the board, duality of the CEO impacts on manufacturing companies in Ghana financial performance. Quantitative research method was used in obtaining data from the financial statements of manufacturing firms; random and fixed point panel regression was conducted using E-Views version 12 software. The results revealed that, size of the board was a significant determinant of performance. Independence of the board was a significant determinant of performance. Also, diversity of the board was a significant determinant of performance. On the contrary, size of the board was not a key determinant of performance. The study concludes that corporate governance practices impact on manufacturing firms. This study therefore recommends that business units should actively encourage corporate governance practices in order to ensure better performance to get the eyes of potential investors. The recommendation of the study is that management of manufacturing companies should actively encourage corporate governance practices in order to enhance financial performance.
Description
A thesis submitted to the department of accounting and finance, Kwame Nkrumah university of science and technology, school of business in partial fulfillment for the award of the degree of master of science in accounting and finance