Abstract:
In the early 20th century, when companies grew larger, the management got separated from the ownership. There arose the agency problem between the shareholders, who were the owners of the companies, and the managers, who were the controllers of the companies, when managers started acting in their own interest instead of the shareholders. Then, the emergence of transparency, accountability, and control introduced the term Corporate Governance. Corporate governance is the set of rules and practices that defines the rights and distributes the responsibilities among the major stakeholders, such as shareholders, management, the board of directors, and other stakeholders. Good corporate governance practices lead to wealth maximization for shareholders (Alodat et al., 2022). One of the prominent advantages of good corporate governance practices is that it helps in reducing agency costs, encourages investment, and improves a firm’s performance. Like the rest of the world, Security exchange commission of Pakistan (SECP) and the State Bank of Pakistan (SBP) also mandated the implementation of corporate governance practices in firms operating in Pakistan. It has become very critical to look at the level and intensity of corporate governance practices being followed in the firms operating in Pakistan, after the major corporate scandals in firms such as PIA, Adamjee Insurance, Masood Textile Mills, Lucky Cement, PSO, MCB Bank, AkzoNobel Pakistan, and HBL Bank. That is one of the reasons we chose PTCL, one of the leading telecommunications companies, to get to know at what level the corporate governance rules and practices are being implemented and if these practices have any influence on the financial performance of PTCL. The project is organized as, Chapter 1 is the Introduction, and Chapter 2 is a review of past literature related to the corporate governance practices. Chapter 3 is about the methodology, such as research design, data collection sources, and the study of different corporate governance variables. Chapter 4 discusses the results. Chapter 5 explains the benefits of this project, and Chapter 6 concludes this project.
