It is widely accepted that good corporate governance improves the firm’s performance (Brickley, 1997).
Many literatures are published regarding this topic but they focused only on the basis of developed countries related to Board size and Board composition. (Bhagat, 2002).
There is no any relationship found in between CG and Firm performance. (Park, 2003).
Fich and Shivdasani find in their article that the firms with director stock option plans exist higher market value ratios and profitability and the authors concluded that a positive stock market reaction lies when firms announce stock option …show more content…
But there is no significant relation with ROA. (Dr. Metin COŞKUN And Dr. Özlem SAYILIR, International Journal of Business and Social Science Vol. 3 No. 14 [Special Issue – July 2012]59“Relationship Between Corporate Governanceand Financial Performance of Turkish Companies”
, pg 61. 62)
In Iran it is established that there is a significant relationship between corporate governance mechanisms and finance patterns of 53listed companies in a five year period. The correlation and multivariate regressions were used to test the relationship between the variables; while the significance of the model was confirmed by F-statistics. (Mahmoud Moeinaddin, 2012)
The authors used ROI and Tobin Q as dependent variables to findout the relation between CG and firm performance. (www.ccsenet.org/ijef Intemational Joumal of Economics and Finance Vol. 4, No. 6; June 2012“The Effect of Corporate Govemance, Corporate Financing Decision and Ownership Structure on Finni Performance: A Panel Data Approach from Tehran Stock Exchange, Nassim Shah Moradi', Mahmood Moein Aldin', Forough Heyrani' & Mohsen Iranmahd