Abstract:
Purpose: This study has performed with an objective to determine the impact of corporate
governance practices including disclosure transparency, executive compensation, relationship
with shareholders and board of director of automobile firms in determination of return on
assets & return on equity ofthe Pakistan.
Methodology & Design: This research study is quantitative in approach following numerical
interpretation. In addition, this research study is secondary in nature as instant data on
selected set of variable in case of Pakistan are available in annual reports. Furthermore, this
study has adopted with explanatory research approach to explain the impact of board of
director, relationship with shareholders, executive compensation and disclosure on firm’
financial performance i.e. return on assets & return on equity. This study is focused on
automobile industry in Pakistan to investigate the impact of corporate governance practices
on firm’s financial performance. This study used with regression technique to determine the
impact of disclosure transparency, executive compensation, relationship with shareholders
and board of director on return on assets & return on equity.
Findings: It has found through this study that there is a significant impact of disclosure
transparency, relationship with shareholders and board of director
In this context, board of directors and disclosure have found relatively higher
impact on firm’s return on assets as compare to other factors. Furthermore, only board of
director score has only found with significant impact in determination ofreturn on equity Limitations: Time, knowledge to techniques, financial and human resource factors have
found critical factor to limitations of current study.
Recommendations: It is good to apply with better disclosure practices, relationship
development with shareholders, executive composition and board of director structuring to
determine its optimum impact on return on assets of listed firms in automobile industry.
