Does Corporate Governance Practices Influence Financial Performance and Corporate Growth: Indian Perspective

Abstract

This article endeavours to investigate the impact of corporate governance practices on financial performance and corporate growth considering a sample of leading 88 non-financial companies listed on the National Stock Exchange for the period 2011–2020. Using static panel data technique, the results show that the proportion of female directors in boardrooms maintains a significant and positive association with corporate financial performance, while board independence and corporate financial performance are associated negatively. On the other hand, no noticeable relationships are found between board size, CEO duality, and corporate financial performance. Moreover, the results show that the proportion of female directors on boards and corporate growth are associated positively, whereas board size, board independence and CEO duality appears to have no significant associations with corporate growth. The results are re-examined by employing several tests, including sensitivity analysis and alternative model specifications and are held robust. The empirical findings offer considerable impetus for corporate policy makers or regulators to set up the needed policies and regulations in the light of strengthening corporate governance practices.

DOI: https://doi.org/10.21863/jcar/2024.13.1.010

Keywords: Corporate Governance, Corporate Financial Performance, Corporate Growth, NSE 100, Non-Financial Companies, Static Panel Data Technique, Fixed-Effects Model, Robustness Tests, Emerging Market, India

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