The paper "Impact of Corporate Governance on Firms Performance" is an outstanding example of a finance and accounting research proposal. Effective corporate governance should be one that essentially guarantees a firm’ s investors value from their investment through ensuring that the firm’ s resource utilization is within the agreed measures (Arfan & Saad 2015). According to economists, a firm’ s responsiveness to the internal as well as external market conditions is largely dependent on the management criteria of the firm and the ability of the specific firm’ s governing structure. Corporate governance also portrays the relationship amongst both the internal and external stakeholders of the firm (Nini, Smith and Sufi 2012).
The main internal stakeholders in most cases are the board of directors, executive management and the staff employed in the firm whereas the main external stakeholders are the shareholders of the firm, debt holders, customers, suppliers, trade creditors and government among others. Effective corporate governance should fundamentally guarantee shareholders' value by ensuring the appropriate use of firms' resources, enabling access to capital and improving investor confidence. Subsequently, the corporate governance instrument has been an essential issue (Masulis, Wang and Xie 2012).
For example, the Sarbanes-Oxley Act was simply ordered in the year 2002 to help in improving the corporate governance system which is considered as the need of money related unrest and it was finished with the desire that governance instrument might be strengthened both the general population certainty, unwavering quality and exactness of the financial data given to the general population (Mitton 2002). The objective of the study is to explore the effects of corporate governance on the financial performance and efficiency of a firm. Study objectives To determine if corporate governance affects a firm’ s financial performance and efficiency To identify and measure the negative implications of poor governance on a firm’ s financial performance and efficiency To demonstrate the impacts of ineffective and effective corporate governance practices on a firm’ s financial performance.
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