Impact of Audit Committee, CEO Duality and Ownership Structure on Firm Financial Performance: Evidence from Distressed and No distressed Non-Financial Firms of Pakistan.

Abstract

This study has been aimed of investigating the impact of audit committee, CEO duality, ownership structure the corporate governance practices on financial performance of distressed and non-distressed non-financial firms in Pakistan. This study has considered managerial ownership structure, institutional ownership, Independent audit committee, CEO duality, ownership concentration as independent variables. Board structure and Leverage has been considered as a control variable. Whereas, financial performance has been considered as the dependent variable. Non-financial distressed and non-distressed firms of Pakistan have been chosen for testing the relationship between variables of this study mentioned above. Secondary sources of data (BSA Balance sheet Analysis & Annual reports) have been used for data collection regarding variables of this study from the period of 2014 – 2019. A sample size of 1350 has been finalized to represent the entire population. Collected data has then been analyzed through statistical instruments such as correlation and regression by using Strata. Based on the findings, it has been concluded that managerial ownership structure has significant impact on financial performance return on assets (ROA) while insignificant impact on (ROE) in distressed non-financial Pakistani firms. On the other side the managerial ownership structure has significant impact on financial performance return on assets (ROA) while insignificant impact on return on equity (ROE) in non-distressed nonfinancial Pakistani firms, Whereas the institutional ownership has significant impact on financial performance return on assets (ROA) while insignificant impact on (ROE) in distressed non-financial Pakistani firms. On the other side the institutional ownership has significant impact on both return on assets and return on equity (ROA & ROE) financial performance in non-distressed non-financial Pakistani firms. Furthermore, ownership concentration has significant impact on financial performance return on assets and return on equity (ROA& ROE) in distressed non-financial Pakistani firms. On the other side the ownership concentration has insignificant impact on both return on assets & return on equity (ROA & ROE) financial performance in non-distressed non-financial Pakistani firms. Additionally, the independent audit committee has significant impact on financial performance return on assets and return on equity (ROA& ROE) in distressed non-financial Pakistani firms. On the other side the independent audit committee has insignificant impact on both return on assets & return on equity (ROA & ROE) financial performance in non-distressed non-financial Pakistani firms. Finally, the CEO duality has insignificant impact on financial performance return on assets and return on equity (RO A& ROE) in distressed non- financial Pakistani firms. On the other side the CEO duality has significant impact on both return on assets on return on equity(ROA & ROE) financial performance in non-distressed nonfinancial Pakistani firms.