Title: Is corporate governance relevant to firm performance? Evidence from Indian manufacturing companies

Authors: Subhas Mondal; Tarak Nath Sahu

Addresses: Department of Commerce, Vidyasagar University, Midnapore-721 102, West Bengal, India ' Department of Commerce, Vidyasagar University, Midnapore-721 102, West Bengal, India

Abstract: This article empirically examines how the performance of Indian manufacturing corporations is affected by corporate governance practices. The study has used panel data comprising of 76 manufacturing companies listed in BSE, for a consecutive six-year period, from 2015-2016 to 2020-2021. The study has applied panel data regression model to enquire the impact of ownership structure variables; and also board composition variables on firm performance using Tobin's Q and ROA. The findings reveal that ownership structure variables, board size and multiplicity of the board positively affect both ROA and Tobin's Q. While independent board and women director show positive effect on Tobin's Q, the CEO-duality is negatively associated with Tobin's Q. The study suggests policymakers to enhance the multiplicity of directors and gender diversity, to maintain the right proportion of board independency, and to increase the size of board. Policymakers may also restrict the CEO to play dual role.

Keywords: board composition; ownership structure; CEO-duality; Tobin's Q.

DOI: 10.1504/IJBGE.2024.135112

International Journal of Business Governance and Ethics, 2024 Vol.18 No.1, pp.27 - 44

Received: 19 Apr 2022
Accepted: 24 Jul 2022
Published online: 30 Nov 2023 *