The paper "Impact of Corporate Governance on Firm Performance" is an outstanding example of a management research proposal. This research focuses on the important components of the governance styles adopted by major companies and their effect on firm performance. In the past, there have been several measurements of the effect that corporate governance has on the corporate sector but not on firm performance. This paper concentrated on the main styles of governance seen in the market today to find out the effect they have on firm performance. We will use a questionnaire to measure corporate governance in different aspects then we will run a pilot test to calculate the accuracy of the questionnaire.
We will use banks as our sample and then calculate the effect of corporate leadership on their performance. Factor analysis was applied to compute the extreme differences accounted by the best strategies of governance as the free variables. Key Words: Firm Performance, Corporate Governance, Impact Introduction Firm performance is a term used to describe how well an organization can combine its primary assets and be able to generate revenue in a competitive environment.
Corporate governance refers to the decisions made by management and impacts the general operations of the firm. This paper seeks to study the connection between company governance and the performance of the firm. The governance of a company can either be decisions favoring the company’ s shareholders or the board of directors as long as they affect the general performance of the organization (Chong and Lopez-de-Silanes, 2007). It is highly unlikely to find the board of directors of a firm and its shareholders coming to an agreement but the two parties are very crucial in making decisions that affect the performance of the firm.
If good corporate governance leads to better organizational performance then the companies that do well in the market should be very well-governed. In the 90s, the stock earnings of those companies with solid shareholder privileges performed much better than stock earnings of those companies with weak privileges of the shareholders by an estimated 8.5% p. a on a risk-adjusted basis.