Impact of Corporate Governance Practices On Firm Performance: Evidence from Non-Financial Firms Of Pakistan

Abstract

This study has been aimed of investigating the impact of corporate governance practices on financial performance of non-financial firms in Pakistan. This study has considered managerial ownership structure, institutional ownership, board structure, non-executive directors, CEO duality, ownership concentration as independent variables. Leverage has been considered as a control variable. Whereas, financial performance has been considered as the dependent variable. Non-financial firms of Pakistan have been chosen for testing the relationship between variables of this study mentioned above. Secondary sources of data (annual financial statements) have been used for data collection regarding variables of this study from the period of 2012 – 2017. A sample size of 225 has been finalized to represent the entire population. Collected data has then been analyzed through statistical instruments such as correlation and regression by using Stata. Based on the findings, it has been concluded that managerial ownership structure, board structure, ownership concentration, and leverage has significant impact on financial performance (ROA, ROE, EPS). Whereas, institutional ownership, non-executive directors, and CEO duality has insignificant impact on financial performance (ROA, ROE, EPS) on non-financial firms in Pakistan.