topics for corporate governance research paper

Corporate Governance Research Paper Topics

This guide provides a comprehensive list of corporate governance research paper topics divided into 10 categories, expert advice on choosing a relevant and feasible topic, and tips on how to write a successful corporate governance research paper. Corporate governance is a critical aspect of modern business that has a significant impact on the success of organizations. As a result, students who study corporate governance are often assigned to write research papers that explore various aspects of the topic. In addition, iResearchNet offers custom writing services that provide expert degree-holding writers, customized solutions, and timely delivery. By using this guide and iResearchNet’s writing services, students can ensure that their corporate governance research papers meet the highest academic standards.

Corporate Governance Research

Corporate governance is a critical aspect of modern business that encompasses the practices, processes, and systems by which organizations are directed, controlled, and managed. As a result, students who study corporate governance are often assigned to write research papers that explore various aspects of the topic, ranging from board structures and executive compensation to shareholder activism and stakeholder engagement.

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In this guide, we provide a comprehensive list of corporate governance research paper topics divided into 10 categories, expert advice on how to choose a relevant and feasible topic, and tips on how to write a successful corporate governance research paper. In addition, we offer custom writing services through iResearchNet that provide expert degree-holding writers, customized solutions, and timely delivery.

By using this guide and iResearchNet’s writing services, students can ensure that their corporate governance research papers are well-researched, well-written, and meet the highest academic standards.

100 Corporate Governance Research Paper Topics

Corporate governance is a broad and complex topic that encompasses a wide range of issues and challenges facing modern organizations. To help students choose a relevant and feasible corporate governance research paper topic, we have divided our comprehensive list of topics into 10 categories, each with 10 topics.

Board of Directors

• Board independence and effectiveness
• Board diversity and gender equality
• CEO duality and separation of roles
• Board composition and characteristics
• Board oversight and accountability
• Board nominations and elections
• Board leadership and culture
• Board committees and responsibilities
• Board evaluation and performance
• Board compensation and incentives

Executive Compensation

• Executive pay and performance
• Executive pay and firm performance
• Pay-for-performance and pay-for-skill
• CEO pay ratios and pay equity
• Stock options and equity-based compensation
• Executive severance and golden parachutes
• Executive perquisites and benefits
• Executive retirement and pensions
• Say-on-pay and shareholder activism
• Institutional investors and executive pay

Shareholder Activism

• Shareholder rights and activism
• Shareholder proposals and proxy access
• Shareholder engagement and communication
• Shareholder activism and corporate social responsibility
• Institutional investors and shareholder activism
• Hedge funds and shareholder activism
• Shareholder activism and executive compensation
• Shareholder activism and board independence
• Shareholder activism and corporate governance reforms
• Shareholder activism and CEO turnover

Stakeholder Engagement

• Stakeholder identification and analysis
• Stakeholder mapping and prioritization
• Stakeholder communication and dialogue
• Stakeholder participation and empowerment
• Stakeholder consultation and feedback
• Stakeholder engagement and corporate social responsibility
• Stakeholder engagement and sustainability reporting
• Stakeholder engagement and risk management
• Stakeholder engagement and corporate reputation
• Stakeholder engagement and value creation

Corporate Culture and Ethics

• Corporate values and ethics
• Ethical leadership and decision-making
• Corporate social responsibility and sustainability
• Business ethics and compliance
• Corporate citizenship and philanthropy
• Corporate culture and values alignment
• Corporate culture and employee behavior
• Corporate culture and organizational performance
• Corporate culture and innovation
• Corporate culture and risk management

Board-Shareholder Relations

• Board-shareholder communication and engagement
• Board-shareholder conflict resolution
• Board-shareholder cooperation and collaboration
• Board-shareholder activism and response
• Board-shareholder rights and responsibilities
• Board-shareholder agreements and charters
• Board-shareholder engagement and corporate social responsibility
• Board-shareholder relations and institutional investors
• Board-shareholder relations and minority shareholders
• Board-shareholder relations and corporate governance reforms

Regulatory and Legal Environment

• Corporate governance regulations and compliance
• Corporate governance laws and policies
• Corporate governance codes and standards
• Corporate governance enforcement and penalties
• Corporate governance and public policy
• Corporate governance and the role of regulators
• Corporate governance and antitrust laws
• Corporate governance and securities laws
• Corporate governance and data privacy laws
• Corporate governance and intellectual property laws

Risk Management and Disclosure

• Enterprise risk management and oversight
• Risk management and strategic planning
• Risk management and financial reporting
• Risk management and sustainability reporting
• Risk management and cybersecurity
• Risk management and climate change
• Risk management and supply chain management
• Risk management and crisis management
• Risk management and stakeholder engagement
• Risk management and disclosure requirements

International Corporate Governance

• Cross-border mergers and acquisitions and corporate governance
• Corporate governance and foreign direct investment
• Corporate governance and multinational corporations
• Corporate governance and global supply chains
• Corporate governance and global financial markets
• Corporate governance and emerging markets
• Corporate governance and corruption
• Corporate governance and cultural diversity
• Corporate governance and the United Nations Sustainable Development Goals
• Corporate governance and global challenges

Corporate Governance Reform

• Corporate governance failures and scandals
• Corporate governance reforms and their impact
• Corporate governance and shareholder activism
• Corporate governance and executive compensation reform
• Corporate governance and board independence reform
• Corporate governance and stakeholder engagement reform
• Corporate governance and diversity and inclusion reform
• Corporate governance and sustainability reform
• Corporate governance and regulatory reform
• Corporate governance and future trends

By organizing the corporate governance research paper topics into categories, students can easily identify areas of interest and develop research questions that align with their academic goals and interests. The categories cover a wide range of issues and challenges facing modern organizations, from board structures and executive compensation to stakeholder engagement and international corporate governance.

Choosing a Topic in Corporate Governance

Choosing a relevant and feasible corporate governance research paper topic is critical for success in academia. The following are expert tips on how to choose a corporate governance research paper topic:

• Consider your interests : Choose a topic that you are interested in and passionate about. Your enthusiasm for the topic will help you stay motivated throughout the research and writing process.
• Identify a research gap : Choose a topic that fills a research gap or addresses a new research question. This will help you contribute new knowledge to the field and make a meaningful contribution to academic scholarship.
• Consult with your instructor : Discuss potential topics with your instructor and seek feedback on your ideas. Your instructor can help you refine your research question and suggest relevant literature and sources.
• Conduct a literature review : Conduct a literature review to identify gaps and areas of interest within the field. This will help you develop research questions and identify key concepts and themes.
• Consider feasibility : Choose a topic that is feasible given the time and resources available to you. Be realistic about your research scope and the data sources that are available to you.
• Stay current : Choose a topic that is current and relevant to the field. This will help you stay up-to-date on the latest trends and developments in corporate governance.
• Identify a manageable scope : Choose a topic that has a manageable scope. Narrow down your research question to a specific aspect of corporate governance that can be explored in-depth within the scope of a research paper.
• Brainstorm potential topics : Brainstorm a list of potential topics based on your interests, literature review, and discussions with your instructor. Evaluate each topic based on its relevance, feasibility, and potential impact.

By following these expert tips, students can choose a relevant and feasible corporate governance research paper topic that aligns with their academic interests and goals. In the next section, we provide tips on how to write a successful corporate governance research paper.

How to Write a Corporate Governance Research Paper

Writing a successful corporate governance research paper requires careful planning and attention to detail. The following are expert tips on how to write a corporate governance research paper:

• Develop a clear research question : Develop a clear and concise research question that addresses a gap or new research question within the field of corporate governance. The research question should be specific and focused to ensure a manageable scope for the research paper.
• Conduct a literature review : Conduct a comprehensive literature review to identify key concepts and themes within the field of corporate governance. This will help you develop a theoretical framework and provide a foundation for your research paper.
• Select appropriate research methods : Select appropriate research methods that align with your research question and objectives. This may include qualitative, quantitative, or mixed-methods research approaches.
• Collect and analyze data : Collect and analyze data using appropriate research methods. This may include conducting interviews, surveys, or analyzing financial data. Ensure that your data collection and analysis is rigorous and aligns with the research question and objectives.
• Develop a clear and structured outline : Develop a clear and structured outline for your research paper. This will help you organize your thoughts and ideas and ensure a logical flow of information.
• Write a clear and concise introduction : Write a clear and concise introduction that provides background information and context for the research question. The introduction should also clearly state the research question and objectives.
• Develop a comprehensive literature review : Develop a comprehensive literature review that provides a theoretical framework for the research question. The literature review should be organized thematically and include key concepts and themes within the field of corporate governance.
• Analyze and interpret findings : Analyze and interpret the findings of the research. Ensure that your analysis and interpretation aligns with the research question and objectives.
• Develop a clear and concise conclusion : Develop a clear and concise conclusion that summarizes the key findings of the research and provides implications for practice and future research.
• Ensure proper formatting and citation : Ensure that your research paper is properly formatted and cited. Follow the guidelines of the citation style required by your instructor, such as APA, MLA, or Chicago.

By following these expert tips, students can write a successful corporate governance research paper that contributes new knowledge to the field and makes a meaningful contribution to academic scholarship. In the next section, we provide information on how students can benefit from the iResearchNet writing services for corporate governance research papers.

iResearchNet Writing Services for Corporate Governance Research Papers

At iResearchNet, we understand the importance of producing high-quality corporate governance research papers that meet the academic standards of students. Our team of expert degree-holding writers can help students produce well-written and well-researched corporate governance research papers that meet the requirements of their instructors. Our writing services include the following features:

• Expert degree-holding writers : Our writers are experts in corporate governance with advanced degrees in the field. They have the knowledge and expertise to produce high-quality research papers that meet the academic standards of students.
• Custom written works : We provide custom written works that are tailored to the specific needs and requirements of each student. Our writers work closely with students to ensure that their research papers meet their expectations and academic standards.
• In-depth research : Our writers conduct in-depth research to ensure that the research papers are well-supported with relevant and reliable sources.
• Custom formatting : Our writers are well-versed in various citation styles, including APA, MLA, Chicago/Turabian, and Harvard. We ensure that the research papers are properly formatted and cited according to the required citation style.
• Top quality, customized solutions : We are committed to providing top-quality and customized solutions that meet the unique needs and requirements of each student.
• Flexible pricing : We offer flexible pricing options to ensure that our writing services are affordable for students.
• Short deadlines : We can accommodate short deadlines of up to 3 hours for urgent assignments.
• Timely delivery : We ensure timely delivery of research papers to ensure that students have enough time to review and submit their assignments.
• 24/7 support : We provide 24/7 support to answer any questions or concerns that students may have about their research papers.
• Absolute Privacy : We prioritize the privacy and confidentiality of our clients. We ensure that all client information is kept confidential and secure.
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• Money-back guarantee : We offer a money-back guarantee to ensure that students are satisfied with the quality of their research papers.

By using iResearchNet writing services, students can benefit from the expertise of our writers and produce high-quality corporate governance research papers that meet the academic standards of their instructors.

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Writing a successful corporate governance research paper requires careful planning and attention to detail. By choosing a relevant and feasible research paper topic, conducting a comprehensive literature review, and following the tips outlined in this article, students can produce high-quality research papers that make meaningful contributions to the field of corporate governance. Additionally, iResearchNet writing services offer students a valuable resource for producing high-quality research papers that meet the academic standards of their instructors. With expert degree-holding writers, customized solutions, and a range of support features, iResearchNet can help students achieve academic success and excel in their studies. Contact us today to learn more about our writing services and how we can assist you in your corporate governance research paper writing needs.

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The impact of corporate governance on financial performance: a cross-sector study

• Original Article
• Published: 30 May 2023
• Volume 20 , pages 374–394, ( 2023 )

Cite this article

• Wajdi Affes   ORCID: orcid.org/0000-0001-5261-8935 1 &
• Anis Jarboui 2  

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Corporate governance remains the focus of current research and a concept that continues to evolve to meet the needs of business managers. Faced with the need for companies to cope with a world characterized by perpetual change and successive economic crises (Prowse in Revue d'économie financière 31:119–158, 1994), the identification of the results of the implementation of good governance mechanisms in the structure of the management of companies on financial performance remains a necessity that helps managers and researchers specialized in management sciences and financial accounting to have a better visibility on the importance of corporate governance. It should be mentioned that the economic environment and the characteristics of the sectors of activity of the companies remain a relevant criterion in the study of the relation between the governance of the companies and their financial performance. In this sense, we have tried through this research work to study the impact of the implementation of effective corporate governance on the financial performance of 160 companies in the UK between 2005 and 2018 while taking into account the specificity of the business sectors. Through our study, we used multivariate regressions based on FGLS models while dividing our sample to several clusters. As a result, we found that the implementation of good corporate governance leads to the improvement of the financial performance of companies measured by the return on equity. As a motivation, it must be said that this study can be of major importance for future studies that want to make comparisons on the sectoral and temporal level. Indeed, this study gives the possibility for future research work to make comparative studies based on comparisons for different sectors of activity in the UK before and after the Brexit and also after the COVID 19 period.

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Avoid common mistakes on your manuscript.

Introduction

There has been much research on the relationship between corporate governance and financial performance. Referring to the literature on the role of corporate governance, we can cite the work of Shleifer and Vishny ( 1997 ) who consider corporate governance as the set of mechanisms by which capital providers guarantee shareholder profitability. Denis and McConnell ( 2003 ) have emphasized the importance of distinguishing between the notion of internal and external mechanisms of governance and their importance for the providers of funds on all points of value creation.

The study of the relationship between governance expressed by the corporate governance score and the improvement of the performance of the latter remains a vast field of study and research that has inspired researchers in the field of accounting, finance, and taxation (Louizi 2007 ).

The existence of such a relationship has led us to wonder about the factors that can impact this relationship in a direct or indirect way. Considering this fact, we note that managers who behave in a discretionary manner will exert a major influence on the fate of the accounting and tax manipulation of companies and will try to increase their discretionary power.

Within this framework, agency theory has explained this behavior by focusing on the interests of the funders and decision makers in a way that reflects the interest of each party (Jensen and Meckling 1976 ).

From an accounting perspective, the manager often has the power to manipulate earnings while using the accounting estimates and manipulation techniques available to him (Ahadiat and Hefzi 2013 ).

The practices of corporate governance have not stopped evolving. This is presented via the succession of guides to good governance practices that seek to counter the failures detected over time and which manifest themselves at the level of financial scandals, sometimes inducing a harmful imbalance for the global economic fabric. Based on the "FTSE 350 corporate governance review (2013), for the UK, the evolution of good governance guidelines as well as institutions in the field of corporate governance has developed to respond to the panoply of problems that may be directly related to corporate governance.

In the same context, it is important to emphasize that the study of corporate governance must take into account the specificity of each sector of activity since each sector has its own regulations, key success factors, and compliance rules. In our research paper, as our focus is on UK companies, we have chosen to use the 2 digit ICB industry code, which is relevant to the context of our study. In addition, it should be noted that previous research has studied the relationship between corporate governance and financial performance while focusing only on a particular governance mechanism or a particular specificity related to the strengthening of these mechanisms. Again, it must be emphasized that the majority of research studies have examined the relationship between corporate governance and financial performance without giving much importance to the sectoral specificity of the companies studied.

To give a clearer idea of the orientation of our research work and based on previous developments, we can form the following research question:

What relationship can exist between the governance score and financial performance, taking into account the characteristics of the different business sectors in the United Kingdom economy?

It follows that the objective of the research is to examine the relationship between governance score and financial performance while taking into account the characteristics of the business sectors.

This research paper contributes to the existing literature on several levels. Indeed, it consolidates previous research that tried to show the importance of corporate governance in improving financial performance. Moreover, it focuses on the effect of changes in the business sectors of UK firms so that we can identify the effect of the quality of corporate governance on the performance of firms related to a particular business sector.

This research paper allows us to study the impact of corporate governance on the financial performance sought by shareholders while basing ourselves on the FGLS method, which allowed us to eliminate the various sources of bias identified when using different regressors, namely the generalized least squares method, the regression with the consideration of the presence of the fixed effect as well as the persistence of the autocorrelation problem.

We will try through this research work to emphasize the possible relations between corporate governance and financial performance which is mainly based on the agency theory. It should also be added that the study of the previous relationship by taking into consideration the sectoral characteristics will lead us to turn to the foundations of the institutional theory. The latter theory emphasizes that an institution is constrained by its social, political, economic, legal and technological environment, which it conforms to in order to guarantee its legitimacy and durability.

In order to achieve our research objective, we will not use a simple governance mechanism to reflect the importance of corporate governance on financial performance, but we will opt for a governance score that better reflects all managerial, strategic and CSR characteristics. To achieve the objective of this research work, the remainder of the paper is arranged as follows. First, in “ Review and development of hypotheses ” section, we briefly discuss previous literature and the development of hypotheses. In “ Research methodology ” section, the research design and methodology are discussed including data, variables description. “ Empirical approach to the analysis of the relationship between corporate governance and financial performance ” section summarizes the empirical results, the discussions of the findings and their implications, including the focus on the difference in industry specifications using different regressors. Finally, in the last section, we conclude the study and provide the implications of our findings and the recommendations for future research.

Review and development of hypotheses

Agency theory and corporate governance.

Corporate governance has always played a fundamental role in monitoring and controlling the proper functioning of business processes transparently. By referring to the various research works, we can see that the agency theory is at the heart of the studies on corporate governance. The work of Ross ( 1973 ) and subsequently Jensen and Meckling ( 1976 ) has indicated that the agency theory is the most appropriate sphere to study corporate governance.

This theory can lead us to reflect on the way in which managers can behave. We can cite the case of companies that offer their managers variable remuneration depending on the growth of turnover. In the same sense, it must be said that internal control efficiency and internal audit within companies can play an important role in strengthening the governance structure of companies. It represents one of the guarantors of the proper functioning of business processes in a controlled environment to ensure the improvement of financial performance (Nyakundi et al. 2014 ).

To further develop the role of agency theory in the governance-performance relationship, we can say that agency theory is an analytical framework for understanding the relationships between a firm's stakeholders, including shareholders and management. According to this theory, shareholders have different objectives from those of managers, which can lead to conflicts of interest. Managers seek to maximize their own wealth and power, while shareholders seek to maximize the value of their shares. To align the interests of stakeholders and improve the financial performance of the firm, agency theory advocates the establishment of an effective governance system. Good corporate governance involves putting in place control and oversight mechanisms to ensure that management acts in the best interests of shareholders. This can include the appointment of an independent board of directors, executive compensation linked to company performance, financial transparency and disclosure of relevant information to shareholders. By establishing appropriate incentives and controls, corporate governance can help reduce conflicts of interest and improve the company's financial performance by increasing the value of the company and the return on investment for shareholders. The importance of corporate governance mechanism and its impact on the financial performance was studied by Yermack ( 1996 ), en plus Shleifer and Vishny ( 1997 ) reviewed the state of corporate governance research using a review of the existing literature. The authors concluded that agency theory is an important framework for understanding the relationship between corporate governance and financial performance, and that it can be used to develop effective governance mechanisms for firms.

Consider a publicly traded company whose shareholders are concerned with maximizing the value of their shares. The company's managers, on the other hand, may have different objectives, such as maximizing their own compensation or maintaining their power within the company. This divergence of interests can lead to strategic decisions that are not optimal for the company or its shareholders. In this case, agency theory suggests that strong corporate governance can help align stakeholder interests and improve the firm's financial performance. For example, the appointment of an independent and competent board of directors can help monitor the activities of executives and make strategic decisions in the interests of shareholders. Similarly, compensating executives based on company performance can provide an incentive to work hard to increase the value of the company.

In summary, agency theory shows that corporate governance is essential for aligning stakeholder interests and improving the financial performance of the firm. By putting in place appropriate control and oversight mechanisms, corporate governance can help reduce conflicts of interest and improve shareholder value.

Effect of governance score on performance

In studies that have introduced corporate governance as a main variable, two main areas have been examined. The first seeks to address governance from a shareholder and capital structure perspective, the second seeks to address the composition of boards of directors and the improvement of the quality of governance mechanisms to improve financial performance. Among the research that has emphasized the importance of capital structure, we can cite McConnell and Servaes ( 1990 ), Nesbitt ( 1994 ), Smith ( 1996 ), Del Guercio and Hawkins ( 1999 ), and Hartzell and Starks ( 2003 ), who found that the presence of institutional shareholders positively affects management behavior. Regarding the research that has dealt with the functioning of boards of directors, we can cite Brickley et al. ( 1994 ), Lee et al. ( 1999 ) who have emphasized the importance of independent or outside directors in improving the level of governance quality. In addition, Jensen ( 1993 ) has shown that dual directorships increase the discretion of the director so that the director can influence the financial outcome. For Dechow and Sloan ( 1991 ), the introduction of the CEO's age as a variable makes it possible to reflect the difference between executives and their behaviors throughout their career and especially in the last year of service. During the last two decades, institutional theory has contributed greatly to the understanding of the behavioral aspect and the explanation of the reaction of the different stakeholders toward corporate governance (Aguilera and Jackson 2003 ; Judge et al. 2008 ). It must be said that this theory has contributed enormously to the study of the interaction between the governance mechanism and the institutional framework in which any firm operates. Several studies tried to examine closely the main characteristics of corporate governance to show if there is a possible explanation of the relationship between corporate governance and fiscal management in a perspective of improving financial performance. While Armstrong et al. ( 2015 ) and Seidman and Stomberg ( 2017 ) found a significant relationship between the latter two variables, Blaylock ( 2016 ) did not find any relationship between these two concepts. Before proposing the research hypothesis of the first chapter, it was necessary to first list the results found by researchers who studied the relationship between corporate governance and financial performance based on the governance index or score.

Indeed, La Porta et al. ( 2000 ) have shown that the value of firms is positively associated with minority shareholders' rights. In their research, they emphasized the role of compliance with good governance practices while focusing on the impact of external governance mechanisms such as the level of control of firms in the market.

Indeed, other research works, such as those of Guney et al. ( 2019 ), have shown that the quality of corporate governance measured by Data Stream's ESG ASSET 4 governance score presents a negative and significant association with financial performance for panel data for a sample of 10171 US companies between 2002 and 2014 classified into 10 industries. Indeed, these authors indicated that there are several studies that have given importance to the relationship between corporate governance and its financial performance and whose results of impact or association are mixed while taking into consideration the sectoral characteristics. Other research works have emphasized the importance of internal governance mechanisms while studying factors related to other aspects such as board structure, board function, executive properties of management, and the effect of compensation (Bhagat et al. 2008 ; Guney et al. ( 2019 ); Walsh and Seward 1990 ). In addition and while referring to the work of Guney Guney et al. ( 2019 ), we can say that several research works have tried to investigate the relationship between governance and the performance of companies that seeks to be consistent with the principles of good governance codes. They have used a governance index in particular; the G-INDEX of Gompers et al. ( 2003 ) which focused on the structure and characteristics within American companies to find in conclusion a positive and significant association between their governance index and the value of the companies, their level of profits, their growth in sales and their reduction in capital expenditure.

We also distinguish the E-INDEX index used by Bebchuk et al. ( 2006 , 2002 ). According to Bebchuk et al. ( 2006 ), the E-INDEX derives from an index that consists of 6 attributes related to the IRRC provisions in the USA and that can allow academics to find meaningful results. In fact, these authors divided the Gompers et al. ( 2003 ) index into two indices: the E-INDEX, which is made up of six governance factors, and the O-INDEX, which is made up of the rest of the provisions or attributes used by Gompers et al. ( 2003 ). It should be remembered that this E-INDEX index includes six provisions, which are: the board of directors, limits on changes in shareholder regulations, poison pills, golden parachutes, the requirement of an absolute majority for mergers, and changes in the charter. As a result, they found that increases in the index level are monotonically associated with economically significant reductions in firm valuation and large negative abnormal returns over the period 1990–2003. Regarding the other 18 Investor Responsibility Research Center (IRRC) requirements that formed the O-INDEX, they do not correlate with reductions in firm valuation or with abnormal market returns. Ribando and Bonne ( 2010 ) tried to analyze the relationship between the ASSET4 ESG index of Data Stream and the performance of the company. Indeed, they used the information coefficient (IC) while trying to find possible relationships between ESG characteristics of firms between 2003 and 2009 and future returns. For these characteristics, they found positive and significant associations with all scores except for the corporate governance component. Jun Xie et al. ( 2019 ) found that board independence has a positive and significant association with financial performance as measured by (ROA). On the other hand, there is a negative and significant association between executive compensation, duality, number of audit committee meetings on the one hand, and financial performance on the other hand. Concerning the presence of women on boards of directors, it does not show a significant relationship with ROA. Finally, the control variable, which is research and development expenses, shows a positive and significant association with financial performance. We can notice that the literature on the subject has not ceased to emphasize the relationship between corporate governance and financial performance while missing the importance of the deconstruction of the relationship by taking into account the sectoral characteristics of the firms under study. For this reason, we can say that our work will present an added value to the previous literature because it gives a lot of importance to the sectoral characteristics. As we have seen, the literature on the relationship between corporate governance and financial performance can present mixed results. This leads us to propose the first research hypothesis, which is as follows:

Corporate governance score has a positive and significant association with financial performance.

In our study, we will try to investigate this relationship taking into account the sectoral characteristics of the firms in the UK economy (ICB Code). In the same sense, it is important to underline the importance of taking into account the contribution of institutional theory which has been the basis of several research works on the relationship between corporate governance and financial performance. For example, we can cite the research work of Rachmawati et al. ( 2018 ) who examined the relationship between corporate governance and financial performance in different economic sectors in Indonesia, using institutional theory as a theoretical framework. The authors found that corporate governance had a positive impact on financial performance in all sectors studied, but that the impact was greater in more regulated sectors. In addition, Boubakri et al. ( 2019 ) examined the relationship between corporate governance, institutional environment and financial performance of Russian firms. The authors found that corporate governance had a positive impact on financial performance. Qin et al. ( 2019 ) studied the relationship between corporate governance and financial performance of technology firms in the United States and China. These authors found that corporate governance had a positive impact on financial performance, but that the impact was greater in firms operating in stronger institutional environments. In addition, Muda et al. ( 2018 ) examined the relationship between corporate governance and firm financial performance in different economic sectors in Malaysia, using institutional theory as a theoretical framework. The authors found that corporate governance had a positive impact on financial performance in all the sectors studied, but the impact was greater in the more regulated sectors.

Research methodology

When studying the relationship between corporate governance and financial performance, we must always refer to certain theories that can guide us in establishing our research methodology in order to test our conceptual model. Referring to the governance literature, we can indicate that there is no single pioneering theoretical framework that can be considered as a foundation for governance research. Nevertheless, we can face a particular set of research currents gathered in a paradigm to explain the logic of the relationships in corporate governance. Thus, we can distinguish the research stream focusing on the contractual aspect of the relationship between agents, principals, and creditors. A such relationship can be detailed in the following part of this research paper.

Sample selection

As mentioned at the beginning of this paper, the targeted context is the United Kingdom. Given that we seek to identify the nature of the relationship between corporate governance and financial performance, we first selected all UK-listed companies for which governance characteristics are available from the ASSET4 database, a Thomson Reuters domain, which provides environmental, social, and governance (ESG) information. This initial selection attempts to capture an initial sample of panel data that corresponds to 349 companies that will remain active, between the period of 1998 and 2019, and we will limit ourselves to the period of 2005–2018, i.e., 14 years. This choice is justified by two reasons. The first is the choice of 2005 as the reference year, which corresponds to the year of adoption and application of IFRS by the United Kingdom. The second is the elimination of the year 2019 which does not present complete information when we collected data. In order to obtain a homogeneous sample that allows us to achieve a consistent interpretation, we have eliminated banks and companies that provide financial services, as well as life and non-life insurance (Table 1 ).

This first elimination reduces our sample to 301 companies, obtained as follows:

When processing the panel data that make up our sample, we were obliged to eliminate observations relating to firms whose functional currency does not correspond to the currency of the context of the study, i.e., the pound sterling. These companies number is about 15. In preparing our data, we were obliged to remove the English companies that are not listed on the London Stock Exchange. The number of these companies is 2. We also eliminated 2 other companies that belong to sectors of activity that could cause outliers in our analysis (Financial services according to the ICB classification). This data processing allowed us to obtain a final sample of 282 companies that served as a basis for the study of the relationship between corporate governance and the financial performance of UK companies (Table 2 ). These steps are summarized in the following data processing table:

For a more in-depth study that aims to analyze the impact of governance on financial profitability, we also eliminated firms with missing observations and with a missing value or a very high age of establishment. They are 21 firms. This reduced the number of firms in the sample to 261 firms. We also eliminated 101 firms with outliers in the dependent variable so that the value varies between − 100% and + 200%, which leads us to a final sample of 160 firms with better homogeneity in the dependent variable (ROE). In fact, there is no hard and fast rule for determining an appropriate range for ROE. However, a range of − 100% to + 200% for ROE can be considered as less extreme for our study because we identified more extremum values. We can add that we have tried to refer to other previous works that have tried to present a homogeneous value of financial profitability ROE cite Masood and Ahmad ( 2012 ) who studied the determinants of capital structure of firms in the manufacturing sector in Pakistan. The authors used regression analysis to study the effect of various factors on the capital structure of firms. The authors also used a homogeneous value of ROE by eliminating ROE outliers to reduce the effect of extreme values on the results of the analysis. The results showed that firm size, tax rate, firm growth, and liquidity have a significant influence on the capital structure of firms in the manufacturing sector in Pakistan. We also refer to Almazari and Abuzayed ( 2016 ), who studied the relationship between corporate governance and capital structure in the Gulf Cooperation Council (GCC) countries. The authors used regression analysis to study the effect of corporate governance on firms' capital structure. The authors also used a homogeneous ROE value by eliminating ROE outliers to reduce the effect of extreme values on the results of the analysis (Table 3 ). The results showed that corporate governance has a significant effect on the capital structure of firms in the GCC countries.

In the processing of the data obtained at the level of the variables of the research model, we found some missing observations that could influence the results. To solve this problem, we have resorted to the literature to know how to treat them. In this framework and by reference to Florou and Galarniotis ( 2007 ), missing values (i.e., not disclosed) are treated as an absence of the variable at the study level and thus, the firms constituting the study sample are penalized in the evaluation of the variable studied. Indeed, the missing values were excluded from the analysis. We can add that in the field of corporate governance research, the variables do not present a remarkable change between the following years. For this reason, we preferred to replace the missing values by the weighted average of the existing variables in order not to reduce our sample of panel data further, which remained cylindrical. This choice was made with reference to Rahman et al. ( 2016 ) and White et al. ( 2011 ).

Measures of variables

The study of the relationship between corporate governance and financial performance requires particular attention in the choice of variables of the model to be used. Indeed, we can refer to the work of Alodat et al. ( 2022a ), who assessed the effect of the board of directors and the audit committee attributes and ownership structure on firm performance. They stated that better governance leads to better financial performance. Mansour et al. ( 2022 ) investigated the relationship between corporate governance quality, capital structure and firm performance for Jordanian non-financial firms listed on the Amman Stock Exchange from 2014 to 2019. The results show that good corporate governance practices have a positive impact on firm performance, and that capital structure can strengthen this relationship. The variables reported that summarizes our model are in the form of dependent variables reflecting the financial performance of firms and independent explanatory variables reflecting the quality of corporate governance as well as other control variables relating to the characteristics of UK firms and reflecting size, debt, and age. Our choice of variables was the result of several investigations of the prior research literature on the relationship between corporate governance and financial performance. Alodat et al. ( 2022a , 2022b ) studied ESG disclosure in Jordanian industrial firms. ESG disclosure is low but improving due to stakeholder pressure. Board size and meetings have an impact on ESG performance, but other corporate governance mechanisms do not. The study provides recent evidence from the literature on disclosure in emerging markets. Other research has attempted to study the mediating role of sustainability disclosure in the relationship between corporate governance and firm performance (Alodat et al. 2022a , 2022b ).

In this sense, we will try to detail the measures of the variables used in our research work starting with the dependent variable, the independent variable and then control variables.

Dependent variable

Previous studies used variables reflecting the financial performance while taking into account the effect of governance (Cornett et al. 2008 ). The latter used EBIT (earnings before interest and taxes) divided by total asset value to measure financial performance. Indeed, the use of EBIT or operating profits divided by total asset value has been used by a range of research studies (Eberhart et al. 2004 ; Denis and Denis 1995 ; Hotchkiss 1995 ; Huson et al. 2004 ; Cohen et al. 2005 ). Also, Cornett et al. ( 2008 ) provide another measure of performance which is profitability, not subject to result management. This is the financial profitability with neutralization of the effect of discretionary accruals which is detailed as follows:

While referring to the research on corporate finance, we can see that several researchers have adopted accounting and non-accounting evaluations to arrive at the quantification of this variable. In our study, we will measure the financial performance as follow (measure proposed by data stream):

It reflects the variation of ROE that adjusts for the effect of preferred dividends. We have opted for the ROE because our objective is to measure the company's performance in terms of shareholder return, ROE measures the return on shareholder investment by comparing the company's net income to the value of its equity. It measures the company's ability to generate profits from the funds invested by shareholders. We will thus consider that this measure of the dependent variable is the most adequate for our analysis which remains adaptable.

Independent variable

Corporate governance practices have not stopped evolving. This is presented through the succession of good governance practice guides that seek to counter the failures detected over time and which manifest themselves in financial scandals, sometimes inducing a harmful imbalance in the global economic fabric. Based on the "FTSE 350 corporate governance review (2013)" elaborated by Grant Thornton (auditing and consulting firm), especially for the UK, the evolution of good governance guides, as well as institutions in the field of corporate governance, have developed to respond to the panoply of problems that may be directly related to corporate governance.

Zahra and Pearce ( 1989 ) have identified several studies that have attempted to investigate the effect of corporate governance characteristics on financial performance. We cite the research work of Zahra and Stanton ( 1988 ) who studied the relationship between the size of the board of directors and the financial performance of companies by measuring it based on the variable (ROE), the gross sales margin, the ratio of revenues net of capital, the earnings per share (EPS), and the log of revenues. Based on a sample of 100 Fortune, 500 companies in the USA between 1980 and 1983 found that board size and the ratio reflecting the proportion of outsiders on boards are not associated with financial performance. Schmidt ( 1977 ), taking into account the US context, focused on the external affiliation of outsiders while measuring financial performance by ROE in 156 industrial firms. Schmidt found no relationship between these two variables. Kesner ( 1987 ) studied the effect of the proportion of insiders at the board level and the percentage of equity held by board members while aiming to explain their effects on gross margin, (ROE), (ROA), earnings per share (EPS), stock price and (ROI). Based on a sample of 250 Fortune 500 companies across 27 industries, he found a positive association between the percentage of board members' ownership and the cited financial performance. In addition, Baysinger and Bulter ( 1985 ) studied the impact of outsiders on the financial profitability (ROE) of 266 companies between 1970 and 1980 and found that the presence of a significant number of outsiders on the board of directors improved their financial performance. Pearce ( 1983 ) studied the effect of directors' skills and attitudes on the financial performance of firms measured by several variables including (ROE). He found, based on the responses of 137 respondents in 8 banks, that there is a strong association between the attitude of directors and the financial performance of their company. Referring to the above, we can say that previous studies have tried to examine the relationship between the different governance mechanisms and financial performance while quantifying the latter by using different variables and financial ratios. Among these variables, it is important for us to focus on the financial profitability of shareholders, namely the ROE, which will be used as the dependent variable for our research. Regarding the variables that measure governance mechanisms, we can distinguish variables that were proposed by Cornett et al. ( 2008 ).

After having exposed these research works, we can see that previous research has used particular measures of governance mechanisms to reflect the quality of corporate governance we allow ourselves to indicate that in our research work we are going to use the governance score (CGVS: Corporate Governance Score) which encompasses a significant number of governance mechanisms, and this one manifests itself as the governance score that we have obtained from the database (Data Stream) for the companies that make a disclosure according to ASSET 4. The latter measures a company's governance systems and processes, ensuring that its board members and executives act in the best interests of shareholders over the long term. It reflects a company's ability, through its use of best management practices, to direct and control its rights and responsibilities through the creation of incentives and control mechanisms to generate long-term value for shareholders. Its value is presented as a percentage so that it can be used to detect the effectiveness of companies in terms of governance. Based on the Thomson Reuters ESG Scores calculation guide (February 2019), we can see that the governance score we will use as an independent variable in our analysis plays an important role in determining the governance component of the ESG score.

Control variables

Control variables refer to the characteristics of UK firms and reflect size, leverage and age. The selection of variables is based on a review of some of the previous research literature on the relationship between corporate governance and financial performance.

LNTA: It is the total assets of the company; in our research work, we will use as recommended in the literature the Log of TA as a control variable for our research model.

leverage = ((short-term debt and a current portion of long-term debt + long-term debt)) /(total assets).

AGE: the age of the company

Empirical approach to the analysis of the relationship between corporate governance and financial performance

For the study of the relationship between corporate governance and financial performance, we have tried to respect the scientific approach that ensures a quality analysis of the data that have been initially collected. It is a matter of following a positivist epistemological posture according to a hypothetical-deductive approach. Indeed, when analyzing panel data, there is a very specific approach to follow and a set of econometric tests that will allow us to obtain the research model that leads us to the realization of the necessary predictions. First, when we use cylindrical panel data, we must verify the necessary conditions that give us the assurance of the reliability of the database studied. The verification of such conditions allows us to have the best unbiased predictor that ensures an efficient interpretation of the associations that may exist between the variables. Then, we must analyze the influence of the fixed effect and the random effect of the observations, which will guide us toward the path of analysis to follow. It should be added that the results of the preliminary tests will give us a better idea of which regressor to use so that we can ensure that all sources of bias in the results are eliminated. Among these preliminary tests, we can mention the homoscedasticity test, the autocorrelation test, the multicollinearity test. In our research approach, we made sure to verify these preliminary tests in order to be able to move on to the analysis of associations via the execution of adequate regression models.

At this level, it should be noted that the estimation of panel data can be carried out through 3 possible estimators depending on the behavior of the data. In this respect, we mention 3 methods, which are the Pooled OLS regression (pooled OLS) which can lead us to the use of the GLS method which eliminates estimation bias problems. As an illustration, it is relevant to mention that the GLS method allows us to overcome the heteroscedasticity problem and the first-order autocorrelation problem. The second method is the fixed effect model (or within model): This model is characterized by the existence of a particular characteristic or behavior for a well-defined set of individuals or the firms in the sample. In our analysis, we are going to move directly toward an approach that targets the verification of the fixed effect while taking into consideration the specific characteristics related to each sector of activity (ICB industry code).

Finally, the third method is the random effect model. In this last case, the individuals understudy can also be influenced by both factors at the same time ( i and t ).

In the context of the analysis of the association that may exist between the governance score and the financial performance of the company and while taking into account a significance level of 5% for the interpretation of the results, we will run the model based on the sample of UK companies that we have specified. This will allow us to verify the strength of the link between the endogenous and exogenous variable which is manifested through an approach that can test the existence of the fixed and random effects. The execution of the model via the command "xtreg" on STATA, which implements the method of generalized least squares (GLS: generalized least square), remains effective for the study of panel type databases. For a more refined analysis and in order to use a more accurate estimator, we will show the results found by the execution of the GLS command which allows finding a better estimate allowing to reduce the bias effect caused by the presence of heteroscedasticity and the first-order autocorrelation. This is the Feasible GLS (FGLS) method. (Feasible Generalized Least Squares).

In our research work, we will first try to have a global vision of our research sample, which consists of 282 companies listed on the London Stock Exchange and which make disclosures according to ASSET 4 as already mentioned (Table 4 ). For this reason, we will expose the descriptive statistics that are manifested as follows:

These descriptive statistics tell us that the sample of 282 firms obtained displays numerous observations, namely 3948 observations.

Regarding the dependent variable, we note that the (ROE) shows a mean of -0.16 which reflects in a global but not precise way that all the companies studied operate in an unstable environment that can be considered unfavorable given the circumstances through which the United Kingdom is passing such as the effect of the repercussions of the global financial crisis of 2008 and the BREXIT. The dependent variable shows a maximum value of 72.06 which is considered an extremely high value in relation to the measure of financial profitability (ROE). The same remark can be made regarding the minimum value of the dependent variable, which is equal to 563.32. It should be noted that these outliers led us to reduce our sample. Concerning the independent variable (CGVS) which is the governance score proposed by Data Stream. This shows an average of 0.67, which indicates that all the companies in our sample give importance to governance and its mechanisms for creating value and improving financial profitability. This governance score has a maximum value of 0.98 and a minimum value of 0.02. These values indicate that there are two types of companies, those that give importance to governance and its mechanisms and those that do not. Moving on to the control variables, we can see that the variable (LNTA), which reflects the size of the company according to the current literature, has an average of 14.03. For the variable (LVERAGE), we have an average of 0.25, which indicates the level of indebtedness of the companies in the sample. Regarding the last control variable, which is the (AGE), it indicates that the average age of the companies studied is equal to 64 years. After presenting the descriptive statistics of our sample which is composed of 282 companies, we will try to start the study of the relationship between their governance score and their financial performance in order to know if we are able to confirm the hypothesis providing the existence of a positive and significant relationship between these variables.

For this reason, we will present our correlation matrix for the sample of 282 companies (Table 5 ).

This correlation matrix clearly shows that (CGVS) has a positive and significant correlation at the 5% level with (ROE). This supports the hypothesis of the existence of a relationship. Indeed, the analysis of the correlation remains insufficient to decide on such a relationship. For this reason, we will proceed to the analysis of the regressions necessary to provide a precise vision of the association between these two variables.

It should be noted that the outliers identified in the descriptive statistics forced us to reduce our sample to avoid problems of discordance and observations with outliers as explained in the approach to the selection of our final sample, which reflects the shift from the sample of 282 companies to the sample of 160 companies. In the rest of our analysis, we will limit ourselves to this sample of 160 firms to avoid being influenced by the high values of financial profitability. During our analysis, we will even try to perform robust regression to validate our results.

It must be said that in our analysis we have based ourselves on the book by William Greene ( 2011 ). Our research approach will be based on the identification of biases that can affect the quality and the level of convergence of the estimator to be used. Indeed, we will check the effect of the individuals studied which merit the use of an approach that takes into account the individual effect of each sector of activity for the analysis of the results. For the random effect and while basing ourselves on William Greene ( 2011 ), we can say that the most adequate estimator is the generalized least square as well as the quasi-generalized least square estimator (feasible) which presents a better level of correction of possible sources of bias (Table 6 ). Indeed, we will start by exposing the descriptive statistics of the 160 companies as follows:

The descriptive statistics mentioned above indicate that the value of the dependent variable which is financial profitability measured by (ROE) has an average of 16.9%, which could lead to an increase in results management. In the same framework, the governance score indicates that it varies between 2 and 98%, with an average of 68.5%. In fact, for companies with a low governance score, we can say that the security of shareholders can be negatively affected. Regarding the control variables, we find that (LNTA) displays an average of 14.152. For the level of debt that is presented through (LEVERAGE), it shows that the companies in our sample display leverage equivalent to 24.5%, and the average age of the companies studied is equal to 68 (Table 7 ). In fact, we did not limit ourselves to the presentation of descriptive statistics according to the companies which are the object of our global sample only but also we used descriptive statistics by sector according to the criterion ICB industry which is summarized as follows:

Moving forward in our analysis of the results, we present the correlation matrix for our sample of 160 listed companies that are characterized by the disclosure of governance characteristics according to ASSET4 (Table 8 ).

This correlation matrix indicates the absence of correlation at the 5% level between (ROE) and (CGVS). However, we can estimate that there is a correlation at the 15% level, which means that in 85% of the situations we distinguish a positive and significant correlation between the financial performance and the governance score. Despite a weak correlation, there is a possible link between the dependent and independent variables. Moreover, and concerning the control variables, we can notice the existence of a negative and significant correlation at the 5% level between (LEVERAGE) and (ROE) which reflects the negative effect of debt on English companies. Similarly, LNTA shows a negative and significant correlation with the financial performance of firms, which is explained by an unfavorable effect of the growth of the political visibility of firms in the UK. In order to unravel and further analyze such a relationship, it is necessary to conduct a correlation analysis by sector to identify those that may imply a correlation. Indeed, the present research work will be based essentially on the study of the relationship between governance and financial performance which has been widely studied by most researchers. Thus, OLS regression will allow us to approach this analysis as presented in Table 9 :

Indeed, it remains clear that the OLS regression presents a positive and a significant association at the 5% level between the governance of firms and their financial performance, measured on the basis of the ROE. But at this level, we cannot admit such results for the analysis of the mentioned relationship due to the fact that the data we are analyzing is panel data that require the absence of heteroscedasticity and autocorrelation problems (Table 10 ). Thus, we can present the preliminary tests in question. We start with heteroscedasticity, which presents a remarkable problem in the data. This manifests itself through the Breusch–Pagan test, which is displayed as follows:

This test is based on a null hypothesis predicting the equality of the variance of the residuals. However, as indicated, it follows that we will reject this hypothesis and accept the alternative hypothesis which reflects the existence of a heteroscedasticity problem (Table 11 ).

Still, within the framework of the reliability of the data quality, we used the Woodridge autocorrelation test which shows the following results:

This test includes a null hypothesis that considers the absence of an autocorrelation problem. However, we find that such a hypothesis can only be rejected. This indicates the presence of a first-order autocorrelation problem, which will be corrected.

We also tested the multicollinearity problem by computing the VIF (Table 12 ). We found that such a problem does not taint the processed data. The multicollinearity test is displayed as follows:

After checking the quality of the data, we proceed to the use of a second estimator namely, the GLS, which is an efficient and unbiased estimator of the parameters of the model with a lower variance. The use of such an estimator presents the following results:

Table 13 shows a P value < 5%. This means that the model is significant in its entirety. Furthermore, it remains clear that the governance score has a positive and significant relationship at the 5% level with financial profitability.

Regarding the control variables, we find that they also show a significant association with the dependent variable. For example, the debt ratio has a negative and significant association at the 5% level with financial performance. This is due to the fact that excessive debt can damage the financial performance of the firm. Regarding age, we find that it does not show a significant association with the dependent variable. These results can only reinforce the confirmation of the basic hypothesis predicting the existence of the positive and significant association between governance and financial performance.

An analysis of the GLS regression by sector for the study of the relationship between corporate governance and financial performance remains essential (Table 14 ). This regression will be presented in this synthetic table, which is displayed as follows:

This table indicates that with the use of GLSs we obtain a positive and significant association at the 5% level between (ROE) and (CGVS) this is in line with the confirmation of our research hypothesis at the level of ICB10, 40, and 50 namely the technology sector, the sector of non-essential discretionary consumption and industrial (Table 15 ). To determine whether the fixed or random effect is the effect that influences the research data, we referred to the Hausman test which indicates a P value = 0.0000 < 0.05, this leads us to reject the null hypothesis predicting the existence of the random effect. The last test is as follows:

To refine the quality of the analysis, we will, in the following, analyze the presence of the fixed effect which will allow us to reinforce the expected result (Table 16 ).

Indeed, the regression of the data taking into account the existence of a fixed effect is as follows:

It remains clear that taking the fixed effect into consideration can only confirm the previous results regarding the association between the governance score and financial performance at the 5% level.

In order to analyze this association by sector, we performed the sectoral GLS regression, taking into account the presence of the fixed effect. In fact, based on the results obtained we can say that we found a positive and significant relationship at the 5% level between corporate governance and financial performance in the ICB 15 40 50 and 60 sectors. However, it should be noted that the association found in ICB 15 will not be taken into account because the model is not significant in its entirety for the companies in this last sector (Table 17 ). To summarize our results, we can present the table of results found, by sector according to the regressor that takes into account the fixed effect which is presented as follows:

In the following, we will try to take into account the autocorrelation problem identified by the fact that the fixed effect estimator is consistent (Table 18 ). Indeed, the regression in the presence of a fixed-effect by correcting the effect of autocorrelation can be presented as follows:

Taking into account the correction of the first-order, autocorrelation leads us to the same finding, which predicts the existence of a positive and significant association at the 5% level between governance and financial performance. An analysis by sector based on the sectoral regression with the presence of the fixed effect, with correction of the autocorrelation for the study of the relationship between governance and the financial performance of the company remains adequate to detail our results. This regression is presented in Table 19 . This analysis by sector, with the correction of the autocorrelation problem of order 1, indicates that we have a positive and significant association at the 5% level between the two main variables studied at the level of ICB35, 40, and 50. It is true that we had found a significant relationship at the level of ICB 15, but such an association will not be taken into account because Fisher test for this sector indicates that there is no overall significance of the model.

To summarize these results, we present the following table, which presents the fixed effect regression correcting for the effect of the first-order autoregressive autocorrelation.

Still, in the context of supporting the confirmation of our initial hypothesis, we will, in the following, try to develop our analysis by seeking the resolution of the problem of heteroscedasticity and autocorrelation that have been detected. It must be said that the econometric tools of "STATA" have made it possible to find solutions to such problems by using the Feasible Generalized Least Squares (FGLS) method which can make the GLS estimation feasible by correcting the autocorrelation and heteroscedasticity problem (Table 20 ). The use of such a regressor gives us the following results:

By analyzing this FGLS regression, we can see that this model is generally significant in its entirety because the P value < 5%. Thus, there is at least one explanatory variable that can analyze the variable to be explained.

The results found indicate that we have a positive and significant association at the 5% level for the 160 firms in our study. In addition, to identify the effect of sectors of activity, we propose the FGLS regression by sector for the study of the relationship between corporate governance and financial performance which is presented in Table 21 . The results obtained can be summarized as follow:

These results indicate that when correcting for the statistical problems identified, we were able to obtain in almost all the sectors of activity studied a positive and significant association at the 5% level between the governance index and financial performance in fact for ICB 10,20,40,45,50 and 55, we were able to obtain a very significant association at the 5% level. It must be said that with the correction of inconsistencies, we can confirm our H1 hypothesis in almost all sectors of activity. This leads us to emphasize the importance of governance in improving the financial performance of firms.

To further summarize our results, we can present the following summary table that analyzes, by sector and by regressor used, the type of association between governance and financial performance (Table 22 ).

As part of the validation of our results, we used robust regression to ensure that our results remained free of bias.

Indeed, we performed robustness checks on the overall sample of 160 companies as well as by sector of activity studied (Table 23 ).

For the overall sample we found these results:

The results obtained after the verification of the robustness of our model validate the results obtained previously indicating the fact that corporate governance presents a positive and significant association with financial performance which further confirms our research hypothesis (Table 24 ).

In addition, we performed robustness checks on the detailed results by sector and obtained the following results:

The results of the robustness checks lead us to validate the previous results obtained mainly in the ICB40 (Consumer Discretionary) and ICB50 (Industrials) sectors.

Comparing the validation results with the previous results, we can see that for the sector ICB 10 (Technology), ICB 35 (Real Estate), ICB 45 (Consumer Staples) and ICB 60 (Energy) we could visualize a positive association between ROE and CGVS (Table 25 ).

These results can be summarized in the following table:

Benefits and contributions

These results indicate that when correcting for the identified statistical problems, we were able to obtain in almost all the sectors of activity studied a positive and significant association at the 5% level between the governance index and financial performance in fact for ICB 10,20,40,45,50 and 55, we were able to obtain a very significant association at the 5% level. It must be said that with the correction of inconsistencies, we can confirm our H1 hypothesis in almost all sectors of activity. This leads us to emphasize the importance of governance in improving the financial performance of firms active in industries, which gives specific importance to the role of governance. It should be noted that our in-depth investigations and the use of robust regression have shown that the significant association between corporate governance and financial performance is still mainly valid for the ICB10 and ICB40 sectors.

Interpretation of results

At this level, we can see that the results that were found by reference to the different regression methods used, lead us to confirm our first hypothesis H1 predicting the existence of a positive and significant association between the governance score and financial performance. Indeed, in order to have better visibility of the effect of the improvement of the results via the correction of the identified econometric problems and to reflect the approach that led us to adopt the FGLS regressor, we propose the following summary table that shows the corrections of the estimates of the strength of the relationship between corporate governance and financial performance when taking into account the sectoral influences and the correction of the various sources of bias.

In our present research, we have tried to focus on the impact of corporate governance on the financial performance of firms in the United Kingdom. The 160 companies studied between 2005 and 2018 are listed on the London Stock Exchange and are characterized by the achievement of corporate social responsibility disclosures according to ASSET4.

In this chapter, we have tried to clarify the important concepts that are directly related to our study on the relationship between corporate governance score (CGVS) and corporate financial performance (ROE). In this chapter, we have also tried to demonstrate how the adoption of good governance measures can be associated with better firm performance. In this sense, we conducted a sectoral analysis according to the ICB code, which allowed us to identify a positive and significant association in the companies of 6 sectors of activity, which are ICB 10 (Technology), 20 (Health), 40 (Secondary consumption), 45 (Basic consumption), 50 (Industrial) and 55 (Basic material or raw materials). These results led us to observe that companies that are characterized by best practices in governance, as well as those with a favorable structure of their board of directors that are well organized and disciplined, can have better financial profitability through the enhancement of their corporate organizational architecture. It should also be added that the establishment of controls and compensation committees reinforces the role of governance in achieving better financial performance. In addition, the protection of shareholders' interests and the consideration of social and environmental factors at the decision-making level can only improve the financial performance of companies. We must add that the robustness checks we have performed confirm and validate the results obtained mainly in the ICB 40 and 50 sectors, i.e., the Consumer Discretionary sector and the Industrial sector.

Through our study, we have corroborated the findings drawn by a significant number of research works. Nevertheless, the originality of ours, which we consider innovative, consists in focusing attention on the different sectors of activity in the UK (United Kingdom). We have followed an approach advocating achieving a cross-sector benchmark which allows to reflect the ideas proposed by the institutional theory. This paper evinces that despite the variation in the sectors of activity, the corporate governance plays a key role in improving the financial performance of English corporations. This result is consistent with the foundations of agency theory. We also emphasize the prominence of using the clustering technique with a view to targeting the analysis of the relationship between the corporate governance and financial performance. The analytical approach we have used has inspired several previous authors, including Lo and Shekhar ( 2018 ) who examined the impact of corporate governance on the financial performance of companies in Germany. They identified a positive association between strong corporate governance and financial performance in all industries studied. In addition, and for the economy of the UK, we can cite the research of O'Sullivan and Carroll ( 2021 ) which studied the impact of corporate governance on the financial performance of firms in the United Kingdom using a cluster approach to distinguish firms according to their industry. The results found suggest that corporate governance is positively associated with financial performance, but that this relationship varies across industries. This confirms the role of our research in consolidating the results of previous research and highlighting the importance of the use of cluster analysis in the dissection of the phenomena studied.

Moreover, identifying the positive and significant association between the corporate governance in most sectors studied makes us confirm our research hypothesis, which remains well founded by a rich literature (Alodat et al. 2022a , 2022b ; Jia et al. 2021 ; Khan and Hanafi 2021 ; Agyei-Mensah and Gyimah 2020 ; Abdulsalam and Oyewo 2019 ). Previous research has identified mixed results owing to the differences in the measures used to assess the corporate governance quality or to measure the financial performance level.

Through this research work, we have also been able to validate that corporate governance plays a key role in improving the performance of English companies, mainly in the consumer discretionary sector and in the industrial sector. These results reflect the level of detail of our analyses which give a lot of importance to the sectoral characteristics of the firms.

Like any research study, we have found difficulties in the data collection process. Yet, our strength and originality consist in a new empirical approach making us dismantle a particular phenomenon. This latter has been widely studied in the different sectors of activity through analyzing the corporate governance research. This remains substantial from a managerial point of view, and extremely beneficial for advisors and decision-makers at a scale characterized by a more remarkable degree of precision. What is more, it is worth noting that our work has some limitations related to the study period dealing only with the period before Brexit (the withdrawal of the United Kingdom from the European Union). The process of preparing the database has also led us to eliminate several companies, but this is necessary to avoid any source of econometric bias.

To put this into perspective, we suggest carrying out a comparative study of the UK corporations before and after the Brexit period. This period has been characterized by a political and regulatory flow, especially at the European and international levels. Furthermore, the studies on corporate governance mechanisms in times of health crises, such as the COVID-19 pandemic period, are significantly important. In this sense, we have only introduced in our study the health sector, but this may necessitate more detailed investigations in future works.

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Affes, W., Jarboui, A. The impact of corporate governance on financial performance: a cross-sector study. Int J Discl Gov 20 , 374–394 (2023). https://doi.org/10.1057/s41310-023-00182-8

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Home » Blog » Dissertation » Topics » Corporate Governance » Corporate Governance Dissertation Topics (28 Examples) For Research

Corporate Governance Dissertation Topics (28 Examples) For Research

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Corporate governance refers to the code of conduct for global business corporations. It is important for businesses to act responsibly and contribute to the betterment of society and people. As the concept of corporate governance has emerged, the scope and area for research have increased. We provide you with a list of corporate governance dissertation […]

Corporate governance refers to the code of conduct for global business corporations. It is important for businesses to act responsibly and contribute to the betterment of society and people. As the concept of corporate governance has emerged, the scope and area for research have increased. We provide you with a list of corporate governance dissertation topics.

The research topics on corporate governance and project topic on corporate governance are listed to help students in selecting a topic for their research and thesis. We have sorted down some of the most interesting corporate governance dissertation topics and can provide you with a brief on the selected topic.

A list Of Corporate Governance Dissertation Topics

A comparison of corporate governance policies and practices in the years 2010 to 2020.

Studying the impact of corporate governance practices on the management and leadership styles.

Identifying the most effective corporate governance strategies and its impact on organizational reputation.

An integrated analysis of the corporate governance practices in developing countries.

To investigate the impact of corporate governance policies and their implementation on the monetary success of large businesses.

Analysing the competence of corporate governance in a state-owned enterprise in the UK.

Comparing the policies of corporate social responsibility and its causes and effects.

Can effective corporate governance contribute to dealing with the global recession?

Studying the role of audit practices in corporate governance.

Evaluation of corporate governance regulations in the US and the UK.

Studying the importance of ethics in corporate governance taking a real-life case example.

A literature review on the corporate governance in a family-based business.

To study the impact of corporate governance on earning management in SMEs.

How does corporate governance affect the financial performance and financial stability of a business?

Studying the board attributes and corporate social responsibility disclosure.

Investigating the relationship between corporate governance and operating cash flow.

How does effective corporate governance help in building and maintaining relationships with the strategic partners?

To study the impact of ownership structure and corporate governance on the success of a business.

Does effective internal audit help in developing corporate governance policies and regulations?

To investigate the effect of accounting conservatism and corporate governance on tax avoidance.

Studying the impact of corporate governance on voluntary risk disclosure in large businesses in the UK.

The relationship between corporate governance and enterprise risks in the banking industry.

The contribution of innovation in enhancing corporate governance in organisations.

The importance of developing a code of conduct to manage organisational behaviour.

A literature review on corporate governance and its growing importance.

Studying and comparing the laws and policies related to corporate governance in the UK and the United States.

What is the role of corporate governance in the case of blockchain technology?

The role of corporate governance in long-term competitiveness based on value-added measures.

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Please note you do not have access to teaching notes, bibliometric analysis on corporate governance topics published in the journal of corporate governance: the international journal of business in society.

Corporate Governance

ISSN : 1472-0701

Article publication date: 23 August 2022

Issue publication date: 26 January 2023

This study aims to highlight the current trends in the literature on corporate governance by applying a bibliometric review of papers on corporate governance topics published in the journal of Corporate Governance: The International Journal of Business Society (Bingley) .

Design/methodology/approach

Bibliometric analysis is a quantitative and qualitative approach applied to bibliographic materials that highlights the core theoretical and empirical contributions to a specific research field. This analysis was based on keyword cartography, bibliometric authors’ citation analysis, bibliometric papers’ co-citation analysis, bibliometric references’ co-citation analysis, journals’ co-citation cartography and qualitative content analysis. It reviews 353 articles on corporate governance published in the journal of Corporate Governance (Bingley) . Bibliometric analysis was performed using VOSviewer, and content analysis was performed using WordStat.

The results identify three major clusters: corporate governance; board of directors; and firm performance. In addition, the results reveal that the journal Corporate Governance (Bingley) has experienced increasingly important growth in research papers on corporate governance topics and citations, reflecting its significant contribution to the corporate governance research field. This study also presents recommendations for future research in this field.

Practical implications

The findings of this study have implications for corporate governance research, such as the impact of ownership structure and the board of directors on environmental, social and governance disclosure. To the best of the authors’ knowledge, this study is the only one to review the key corporate governance research topics on which papers published in the journal of Corporate Governance (Bingley) are focused and can be largely used for corporate governance practices.

Originality/value

This study provides an overview of how the literature on corporate governance research has developed, as well as a summary of the most influential authors, along with countries, organizations and journal sources. This offers an opportunity for future research to focus on this topic.

• Bibliometric analysis
• Corporate governance
• Content analysis

Acknowledgements

The author thanks the anonymous reviewers for their insightful comments.

Ellili, N.O.D. (2023), "Bibliometric analysis on corporate governance topics published in the journal of Corporate Governance: The International Journal of Business in Society ", Corporate Governance , Vol. 23 No. 1, pp. 262-286. https://doi.org/10.1108/CG-03-2022-0135

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• Open access
• Published: 05 August 2022

Corporate governance looking back to look forward in Pakistan: a review, synthesis and future research agenda

• Sattar Khan   ORCID: orcid.org/0000-0001-9180-8336 1 ,
• Yasir Kamal 1 ,
• Shahid Hussain 2 &
• Muhammad Abbas 3  

Future Business Journal volume  8 , Article number:  24 ( 2022 ) Cite this article

6133 Accesses

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The basic aim of this paper is to systematically review the corporate governance research trends in Pakistan and to give directions for future researchers in this field. The methodology adopted in this paper is “Systematic Literature Review,” 108 papers have been used from the period 2002–2020 along with 17 research theses in this study. The findings of this study show two trends in corporate governance research first one form 2008 to 2016 and the second one is from 2017 to 2020. The first trend shows that corporate governance (variables) is linked with traditional topics such as firm performance, dividend policy, capital structure, cost of capital and earnings management. The theory which is mostly used in the first corporate governance trend is the agency theory. In the second trend, corporate governance (variables) are linked with multiple issues while taking various theoretical perspectives such as risk taking, tunneling, CSR, investment portfolios, board-related issues, financial distress and much more. This paper has identified and filled the research gap by writing a comprehensive review paper of the prevailing corporate governance literature and has given directions for future researchers to consider it. To the best of researchers’ knowledge, this is the first study that has systematically reviewed and synthesized the corporate governance literature by adopting the systematic literature review methodology in Pakistan an emerging economy. It is an extensive effort for the purpose to encourage the interested researchers/scholars to add and expand their contributions to the corporate governance literature in Pakistan on the potentially identified areas of corporate governance.

Introduction

The basic aim of this study is to review, synthesize, assess and integrate the existing knowledge of Corporate Governance (hereafter, CG) and related topics in the Pakistani context, to examine the research trends in CG-related studies and issues in Pakistan, since the implementation of first Corporate Governance Code (hereafter, CCG) in 2002 and to give future research directions for potential researchers. The East Asian Financial Crisis 1997 and the famous Enron Scandal 2001 focused the academia, regulators and policymakers to improve governance structure in the companies and brought to light the importance of an effective institutional framework. According to Zitouni [ 158 ] since 1992 of the “Cadbury’s Report,” more than 400 CG codes have been published in different countries worldwide with different standards, principles and suggestions to effectively regulate the CG practices. Therefore, in order to improve the firm governance, board oversight and cope with international trends the Securities and Exchange Commission of Pakistan (hereafter, SECP) implemented the CCG 2002 to strengthen the board and audit committee functions, improve disclosure in the shape of the internal and external audit function and other good governance measures in line with international standards necessary for corporations.

Since the incorporation and promulgation of the CCG in 2002 in Pakistan, a new trend of research started in Pakistan and many researchers in Pakistan researched the topic of CG-related variables with firm financial performance [ 14 , 20 , 38 , 47 , 71 , 78 , 82 , 94 , 121 , 124 , 147 , 148 , 153 ], firm value [ 49 , 90 , 92 , 104 , 112 , 135 , 138 , 150 , 155 ], cost of capital [ 54 , 61 , 62 , 64 , 102 , 122 , 137 ], investment efficiency [ 129 ], cash holding [ 25 , 77 , 116 , 146 ], related party transactions [ 34 ], 56 , 57 , 141 – 145 , accounting conservatism [ 111 ], disclosure and audit quality [ 102 , 105 , 111 , 140 ], earnings quality [ 90 , 92 , 119 ], dividend policy [ 20 , 23 , 30 , 32 , 44 , 88 , 109 , 123 ], risk taking [ 15 , 35 , 55 , 97 , 98 , 143 , 144 , 145 ], corporate social responsibility [ 29 , 51 , 112 ] and earnings management [ 19 , 42 , 47 , 61 , 63 , 65 , 66 , 73 , 89 , 100 , 101 , 107 , 113 , 122 , 149 ].

The review of the above study shows that most of the studies are empirical in nature targeting specific variables, theories and utilizing various sources of data, in addition to this, there is a lack of review-based paper on CG in the Pakistani context, consequently, there was a need to make a comprehensive analysis of CG-related studies with different theories and variables. Therefore, the objectives of this study are to assess and consolidate the extant research about CG and related topics in Pakistan, to examine the research trends in the CG-related studies and issues from 2002 to 2020 in Pakistan, and provide guidance for future researchers to pursue new areas in CG related to Pakistan. In order to achieve the objectives of the study, we have gone through the review of Pakistani academic Journals recognized by the Higher Education Commission (hereafter, HEC) for the period of 2002 to 2020 Footnote 1 as well as internationally published research work via a systematic literature review approach. The scope of this review paper is the studies related to CG and related topics published within Pakistani journals or international journals outside Pakistan which can be found in google scholar a bibliographic database and the largest academic articles database [ 8 ]. Moreover, CG is a very broad and a comprehensive discipline; therefore, this review study specifically focuses on those topics related to CG such as ownership structure, board structure, audit structure, CEO and board of directors’ roles & functions, CEO & board of directors’ features and family ownership, in addition to this, family business groups, business groups affiliation and earnings management-related studies are also included which may be linked with various types of dependent(predicated) variables. Moreover, the time period for this study is ranging from 2002 to 2020. Footnote 2 The reason for choosing this time period is the promulgation of the first code of corporate governance in Pakistan, furthermore, CG research gained its momentum in Pakistan after the implementation of CCG 2002 in Pakistan.

The findings of this study show two trends of CG research, one starts from the period of 2008 to 2016, and the second is from 2017 to 2020. The first trend of CG research shows that a large portion of the studies has linked CG with firm performance, dividend policy, cost of capital, capital structure and earnings manipulation. In addition to this, most of the studies in the first CG research trend have employed a small sample size, utilized the secondary sources of the data and researched under one specific theory which is in most cases agency theory. However, in the second CG research trend which is ranging for the period of 2017 to 2020 shows that CG is linked with multiple issues such as risk taking, tunneling, CSR, investment portfolios, board-related issues, financial distress, investment efficiency and much more. Moreover, the findings show that most of the studies are empirical in nature and utilize a secondary source of data and represent the study under different CG and finance-related theories. Furthermore, in this period the studies have used larger sample as compared to the first trend, additionally, the studies of this research trend show a specific element of CG such as the board of directors, CEO characteristics, specific ownership type, pyramidal ownership, and some other variables such as affiliation with group or bank, product market competition, disclosure and political connection are linked with CG and other related variables.

This review paper contributes to the CG literature particularly in Pakistan, in the following ways. Firstly, our review paper contributed systematically a comprehensive review on CG, by organizing, integrating and analyzing a body of dispersed CG work on Pakistani context. More specifically, in this review paper 125 studies have been analyzed, and then categorized them into four board research themes of CG. Secondly, this study has pointed out the focus on previous research of CG in terms of ownership structure, board structure and other related CG elements. Thirdly, to the best of our knowledge, this review is the first systematic literature review paper on CG in the Pakistani context, it is an extensive effort for the purpose to encourage the interested researchers/scholars to add and expand their contributions to the CG literature in Pakistan on the potentially identified areas of CG as identified and pointed out in “ Future prospects ” section in this research study. Lastly, this study not only integrated and extended the extant research on CG but offers future directions in the key identified areas of CG research to the potential CG scholars.

The scheme of the study is as follows, section 2 presents “ The historical view of different corporate governance codes in Pakistan ” of different corporate governance codes in Pakistan, research methods and systematic literature review steps are mentioned in section 3 “ Research methods ”, and results are presented in “ Results and findings of the selected studies ” section 4. In section 5 “ Discussion ”, of the study is made while this study is concluded on the future prospectus and conclusion.

The historical view of different corporate governance codes in Pakistan

The corporate sector of Pakistan consists of financial and non-financial institutions. These institutions are regulated by the State Bank of Pakistan (SBP), and Securities Exchange Commission of Pakistan (SECP). Financial institutions such as commercial banks, microfinance banks and development finance institutions are regulated by SBP while all non-financial institutions are regulated by SECP with a listing requirements in PSX. The first code of corporate governance (henceforth, CCG) was implemented in 2002 in Pakistan. The 2002 CCG was based and formulated on the examples of different codes throughout the world [ 56 ]. In this code, it was encouraged to have an independent director in the listed companies, it made compulsory to have training programs for directors, have guidelines for the establishment of an audit committee and the Chief Executive Officer & chairman could be the same persons. The 2002 CCG has no clause of female and expert directors in the board of directors or board’s committees. After a decade of implementation, the 2002 CCG was revised in 2012 by implementing more demanding clauses regarding the board of directors, board committees and compliance clauses.

In the CCG 2012, it is made mandatory that there must be at least one independent director in the board, while in the CCG 2002 it is suggested to be one in the board. In addition to this, it is preferred in the CCG 2012 to have 1/3 of independent directors in the board. Moreover, the independence of the directors in the board is further elaborated in the 2012 CCG as compared to the 2002 CCG. The number of multiple directorships at a time was restricted to 7 companies in the CCG 2012; furthermore, the duality of CEO & chairman is withdrawn. The independence of the Audit Committee was introduced in the CCG 2012 which was not given in the 2002 CCG; furthermore, it was also included that the board chairman and audit committee chairman should not be the same person. The 2012 code does not include any clause on gender diversity and board expertise while on the other hand in addition to the audit committee, the Remuneration and Human Resource Committee were introduced in the CCG 2012 and made this code is a listing requirement in the PSX in the same manner as the previous CCG 2002.

Due to some limitations such as lack of board diversity and expertise, and in order to cope with international trends and practices, SECP revised the 2012 CCG at the end of 2017. It includes the mandatory inclusion of female directors in the board and expertise members in the audit committee as well as reduced the multiple directorships from 7 to 5 companies. The gender diversity, expertise and increase independence in the board were included due to the international trends and practices. Moreover, before the implementation of CCG 2017, there were many legal law precedents of other countries regarding gender diversity to be included in the board such as in Norway gender diversity is 40% along with Sweden 23% in the board. Moreover, there were examples of India, Kenya and Malaysia who directly intervene to address gender diversity and other board issues in the CG codes. In addition to this, at that time when the CCG 2017 was implemented in Pakistan, there was only 6 percent female directors in the listed firms which were far below in the National Assembly of Pakistan (Parliament) proportion which stood at 17 percent, women participation in the labor force in Pakistan which was 15.8% and was below than the proportion of S&P 500 and FTSE 100 companies which are 20 to 25 percent. Footnote 3

Therefore, keeping the above trends and precedents the SECP included the mandatory inclusion of female directors in the board in order to achieve at least 15% female representation in the board unto 2020. Furthermore, financially expertise members in the audit committee as well as one mandatory independent director in the AC who should be chairman of the AC are also included in the CCG 2017 following the Sarbanes Oxley Act (2002). In addition to this, it reduced the executive directors to 1/3 of the board of directors; furthermore, it improves the board independence by including the clause “not less than two members or one-third of the total members” should be independent in the board. Footnote 4

Research methods

Data period and data sources.

The methodology adopted in this paper is “Systematic Literature Review.” This methodology has been conducted on the selected papers for the period of 2002–2020 in order to achieve the objectives of the study. The rationale for selecting 2002 is the starting year of CG in Pakistan, and a new trend of research had started among the Pakistani researchers to research CG-related variables with different variables. The data source for this study is “HEC Recognized National Research Journals of Management Sciences & Economics,” Footnote 5 HEC Research Repository and Google Scholar for the period of 2002 to 2020. In the HEC recognized journals list 12 are X-category Journals, 16 are Y-category Journals and 7 are Z-category Journal.

Research strategy

The methodology used in this study is “Systematic Literature Review.” In order to search the concerned topics in the HEC recognized Journals, HEC Research Repository and Google Scholar keywords strategy is implemented, a different combination of keywords has been used, those keywords were in the combination of dependent and independent variables, the details of those keywords are given in Table 1 . After the review and investigation of 150 volumes of X-Category journals, 159 volumes of Y-Category journals and 19 volumes of Z-Category journals 93 papers were selected for the purpose of this study. Moreover, in the HEC Research Repository, 17 theses were also selected to evaluate it, and lastly, keywords combination research was carried out in Google Scholar up-to 10 pages for every keyword combination and resulted15 papers.

Systematic literature review steps

In the first step of systematic literature review, we search the related literature with the combination of our selected keywords in our data sources such as “HEC Recognized National Research Journals of Management Sciences & Economics,” HEC Research Repository and the Google Scholar. In the first stage, the HEC X-Category journals were targeted, with the detail review of 150 volumes 39 papers were extracted from the 12 recognized journals. In the second stage, the HEC Y-Category journals were focused, after the review of 159 volumes in the 16 recognized journals 47 papers were chosen to include in this study. In the third stage, the HEC Z-Category journals were selected, 6 related papers were taken from the 7 recognized journals and 19 volumes were analyzed for this purpose. The details of the Journals and papers selected from it is presented in Table 2 . In the last stage, in order to review the published theses (Ph.D.) HEC Research Repository has opted. After searching under different keywords in the repository, 17 relevant theses were taken into consideration.

In the second step of the systematic literature review, Google Scholar has been utilized for searching the keywords combination. The Google Scholar is one of the key bibliographic databases [ 103 ] which the researchers used to check their thematic novelty on it, others databases are Web of Science and Scopus. We have chosen Google Scholar due to our access to it, the Web of Science and Scopus are inaccessible to us. We search out our keywords combination on Google Scholar and after each keyword research, we have search 10 pages on it. In this way, 76 research articles were found.

In the third step of the systematic literature review, the research article selected in step 1 and step 2 were taken to eliminate the same and duplicate articles. The Google Scholar articles which were 76 initially was brought down to 15 articles and the eliminated articles were already scrutinized during the “HEC Recognized Journals lists” review. The selected articles from Google Scholar and the journals details are given in Table 3 .

In the fourth step of the systematic literature review, 108 research articles and 17 theses were thoroughly analyzed in order to extract information concerning of the author and study year, dependent variable, independent variable, sample size and population, data period, major findings of the study and theory (s) used in the concerned study or theses (Ph.D.).

The steps no 5 and 6 are carried out in the next two sections.

Results and findings of the selected studies

The results of the selected papers extracted from 38 journals have been shown in the following pages, among them 24 were Pakistani Journals and 14 were international journals. The analysis of the selected papers shows that CG-related variables are linked mostly with firm financial performance, firm value, cost of capital, dividend policy, risk taking and earnings management. In Table 4 , which shows the X-Category Journals shows the results of 39 papers from 2009 to 2020. Table 4 shows that 13 out of 39 papers were linked with firm performance or firm value, 6 papers are between earnings management and CG, 3 papers show the relationship of CG with capital Structure, 2 papers are on the of dividend policy and similarly of cash holdings. The analysis of these studies shows that the majority studies used the Agency Theory in their theoretical framework and the data period is ranging for the period of 2002 to 2017.

In Table 5 , the results of 47 papers of Y-Category Journals are given from 2008 to 2020. In these studies, 4 studies are linked with earnings management, 12 are linked with firm performance, and 6 studies are linked with dividend policy. The cost of capital is linked in 4 paper with CG. In addition to this, 5 papers are linking risk taking with CG, and some papers are linking CG with working capital management, corporate tax avoidance, corporate social responsibility and unexpected stock returns. Moreover, agency theory is used in most of the studies in order to check its relationship with other variables.

In Table 6 , the results of Z-Category Journals are given which shows the findings of 6 studies from 2013 to 2019. In these studies, two studies show the findings of firm performance with CG-related variables, two studies are linking dividend policy with CG. In addition to this, two studies are linking CG with the market rate of returns and financial distress. Moreover, agency theory is used in most of the studies in order to check its relationship with other variables.

The results of the HEC Research Repository are depicted in Table 7 , in this Table 17 theses are evaluated in order to achieve the objective of this study. The findings show that most of the theses used the CG theories in the Pakistani context such as agency theory, stakeholder theory, stewardship theory and some dividend policy-related theories. The time period of these theses is from 2009 to 2019. Most of the studies linked CG-related variables with firm performance, cash holdings, earnings management, cost of capital, capital structure, CSR, financial decision and investment efficiency. In addition to CG variables, group affiliation variable is linked in a few studies such as tunneling and related party transitions. Similar to the above discussion in these theses, most of the theses have linked CG with firm financial performance and firm value.

In addition to HEC recognized journals and HEC Research Repository, the third source which is utilized in this study is Google Scholar. In Table 8 , fifteen selected papers is given which is included after the elimination and deletion of similar studies. The studies period is from 2009 to 2020. In these studies, the dependent and independent variables are quite different as compared to the previous tables. Here in these tables CG, group affiliation, EM and political connections variables are used as independent variables which are not evident in the other tables as shown in the study.

The results and presentation of the selected studies is given in the above mentioned tables, these tables include author and study period, dependent and independent variables, sample and data period, key findings of the studies(theses) and in the last column, the theory which is used in the study is given.

The objectives of this paper are to assess and consolidate the extant research about CG and related topics in Pakistan, and to examine the research trends in the CG-related studies and issues from 2002 to 2020 in Pakistan. So in order to achieve the objectives of the study, this review paper starts with the HEC recognized Pakistani Journals at the first stage and we have reviewed 35 Journals, from these journals the related paper has been extracted these are mentioned in Table 2 , in the second stage Google Scholar a bibliographic database and largest academic articles database [ 8 ] searches out to find and analyze the related studies, this result 15 related studies starting from 2009 to 2020 in the 14 international journals. Moreover, the first decade of twenty first century in Pakistan is the decade of establishing and launching different management sciences and social sciences journals, the first study was traced back to 2008 in which [ 16 ] linked CG characteristics with capital structure decisions. This indicates that Pakistani research journals were starting operating and promoting research in business, finance and other social sciences fields. In addition to this, the second decade of the twenty first century is the decade of budding the CG and related topics research in the Pakistani journals.

Features of the reviewed papers

In this study, a set of 108 research papers and 17 theses has been reviewed. The descriptive details of articles reviewed are given in Table 9 , the most articles have been picked up from Y-category journals while less are taken from Z-category journals. The analysis of this review shows that the majority of the study has empirical in nature except for five studies which are literature reviews or qualitative studies [ 26 , 42 , 74 , 98 , 132 ]. Most of the studies targeting non-financial firms of PSX, utilized a secondary source of data and using agency theory. In addition to this, the sample size of the most of the studies are too small ranging from 10 to 170 listed financial and non-financial firms of PSX. Moreover, 42 articles have used only one theory, 12 articles/theses have been used two theories while 14 articles/theses have been used more than two theories. Additionally, 58 articles/theses did not apply or mention any theory while 52 articles/theses used the agency theory, 3 articles/theses have been used resource dependence theory, 3 articles/theses have been used Stakeholder and 3 articles/theses have been used Stewardship theory. Furthermore, we have made the analysis of the findings, from this analysis different CG themes and subthemes have been emerged. The details of CG themes and subthemes are given in the following paragraphs.

Corporate governance and related studies

The CG (aggregate) is the first major and most used theme in this study. The CG is linked with 65 studies with diverse types of dependent variables in this review study. The researcher has used CG as an aggregate of ownership structure and board structure proxies. Moreover, the researcher in the Pakistani context linked CG with firm performance in 22 studies but the findings are inconclusive [ 20 , 70 , 82 , 124 ], with EM in 13 studies [ 19 , 65 , 66 , 73 , 107 , 122 ], with firm risk in 5 studies [ 35 , 98 , 136 , 143 , 144 , 145 ], with Cash Holding in 4 studies, [ 24 , 25 , 116 ], with CSR in 3 studies [ 46 , 51 , 110 ] and with other topics in 18 studies [ 16 , 26 , 31 , 36 , 71 , 79 , 99 , 108 , 115 ].

Ownership structure and related studies

The ownership structure is one of the important elements of CG. Pakistan is famous for its concentrated ownership structure. The majority of the firms in Pakistan are family owned and have concentrated ownership [ 17 , 58 ]. The second theme which is generated from this review paper is ownership structure. The findings of this review show that ownership structure-related studies mainly revolves around the firm performance mainly financial performance [ 45 , 68 , 70 , 78 , 147 , 148 , 150 ]. In addition to this, some studies link ownership structure with EM [ 37 , 73 , 110 ], dividend policy [ 18 , 33 , 80 , 88 , 109 , 127 ], cash holdings [ 77 ] and other related topics [ 41 , 52 , 55 , 87 , 125 , 128 , 135 ]. Ownership themes that emerged from this review paper are family ownership, excess ownership, institutional ownership and managerial/director ownership.

Board structure and board characteristics

The highest decision making and supervisory body in the companies’ management hierarchy is the board of directors, and it is one of the most important element of CG for monitoring and supervision the management. In this review paper, 18 studies have been related to board structure and board of directors’ characteristics. The findings show that four studies linked board-related variables with dividend policy [ 18 , 23 , 33 , 127 ] & five studies with firm performance [ 21 , 27 , 93 , 106 , 126 ] while three studies linked it with EM [ 119 , 149 , 160 ]. Moreover, other studies linked it with cash holding, financial distress, working capital, CSR and Banks efficiency etc. [ 29 , 97 , 114 , 133 , 146 , 154 ]. Moreover, from this review paper following subthemes of board of directors such as CEO Duality, Gender diversity, Executive Compensation, Board Composition, Audit Committee and, Board of directors &CEO characteristics have been emerged.

The controlling shareholders and pyramidal ownership

In addition to the abovementioned themes of CG, the findings of this study show that, the following additional themes are also emerged such as controlling shareholders and pyramidal ownership (business groups’ affiliations). In the 13 studies, the controlling shareholders’ ownership and pyramidal ownership have been linked with firm performance [ 17 , 48 , 147 , 148 , 152 ], tunneling [ 56 , 57 , 141 ], earnings manipulations [ 37 ], dividend policy[ 44 ], related party transactions [ 141 , 143 , 144 , 145 ], capital structure[ 95 ] and cash holding [ 85 , 86 ]. Moreover, the findings of the studies show that controlling shareholders’ relationship with firm performance is inclusive and mixed [ 17 , 151 ]. Moreover, Hussain [ 56 ] added that in concentrated firms there are a huge amount of related party transactions. In addition to this, Bhutta et al. [ 37 ] reported that pyramidal ownership is positively related to EM while [ 95 ] added that 85 percent of pyramidal ownership firms used debt to run business in Pakistan.

Theoretical underpinning and linked theories

The findings of this study show that there are several theories have been used in the field of CG with related dependent variables. The most used theory during the period of 2002–2020 is the agency theory, which is used in 65% of this review study. Agency theory has been adopted in 52 studies which are quantitative in nature, linking it with firm performance [ 28 , 47 , 67 , 94 , 118 , 130 , 138 ] typically the researcher tried to link it with confit of interest hypothesis which arises due to separation of ownership and control [ 43 , 72 ]. Additionally, the agency theory has been applied to the topics of earnings management [ 19 , 42 , 63 , 73 , 75 , 89 , 107 ] and financial reporting quality [ 119 , 129 ] to check the board of directors monitoring and controlling role over the companies’ management. Moreover, the researchers have also linked the agency theory with dividend policy and related party transactions [ 32 , 37 , 56 , 109 , 127 ] to check it with Type II Agency Problem in the concentrated ownership firms. In addition to this, some research studies have linked agency theory with cost of equity and cash holdings [ 24 , 25 , 50 , 137 ]. Moreover, in 2008 to 2016 period most of the studies have used either agency theory or did not explicitly apply any theory or their theoretical framework in their studies. Additionally, about 10% (8) studies have used packing order theory [ 98 , 122 ], trade off theory [ 109 , 122 ], stakeholder theory [ 25 , 135 , 138 ], and stewardship theory [ 101 ] along with agency theory.

Furthermore, in the period of 2008 to 2016, the literature relied mostly on agency theory, then on other theories such as trade off theory, stakeholder theory and stewardship theory. However, in the last four years of this review study data period, a significant number of theories have been applied by the researchers in the literature. Moreover, the most used theory from the period of 2017 to 2020 is agency theory about 39% (31) researchers have used the agency theory perspective in their studies [ 20 , 36 , 44 , 54 , 126 , 147 , 148 ] linking with firm financial performance, earnings manipulation, cost of equity and cash holding, etc., In addition to this, a combination of agency and other theory such as stewardship theory, upper echelon theory, stakeholder theory, resource dependence theory, signaling theory and other theories have been applied in 12 quantitative studies, which count about 15 percent of total studies. Furthermore, a resource dependence theory is applied with agency theory in the study of [ 146 ], to examine that board is an effective resource in handling corporate cash holdings, the stewardship theory is linked along with agency theory on EM [ 63 , 90 , 92 ]. In addition to this, the upper echelon theory is used along with agency theory and contingency theory to check the features of top female directors/management on firm performance & risk taking [ 97 ]; moreover, information asymmetry theory is used along with agency theory to link it with dividend smoothing [ 23 ]. Additionally, the studies of  [ 29 , 62 , 90 , 92 ] have used stakeholder theory along with agency theory in different research perspectives such as CSR, earnings quality and earnings manipulation. Also, there are a limited number of studies that have used other theories such as positive accounting theory [ 91 ], gender socialization theory [ 149 ], socioeconomic wealth [ 129 ] and signaling theory [ 61 ]. However, during the period of 2017 to 2020, there are 27 studies which are about 34 percent of the total studies, did not have any explicit and clear theoretical framework or theory used in their studies.

The Corporate Governance Research Trends in Pakistan

The findings of this study show two research trends of CG in Pakistan, one is from 2008 to 2016 and the second is from 2017 to 2020. The first CG research trend which is from the period of 2008 to 2016 focuses on the studies which have linked CG with firm performance, dividend policy, cost of capital, capital structure and earnings manipulation. In addition to this, in terms of the research design, most of the studies have employed the quantitative research design and tested the relationship among different variables empirically. Moreover, most of the studies utilized the secondary sources of the data and most often have very small sample size of both financial and non-financial companies of PSX. In terms of theory used in a particular paper or thesis majority of the studies carried out their research under one specific theory which is in most of the cases the agency theory. Surprisingly, the findings of this review study also reported that 31 studies in the first trend of CG in Pakistan which is ranging from 2008 to 2016 did not explicitly adopt any theoretical framework to carry out their research objectives. Additionally, two studies [ 26 , 98 ] are qualitative in nature the former is a literature review paper focusing on CG issues in Pakistan and the latter is a systematic review linking CG with firm risk in financial institutions.

The second research trend of CG which is ranging from the period of 2017 to 2020.This research trend is more advance in terms of theories used, research methodology employed, sample size handled and CG issues tackled. The findings of this review show that in the second CG research trends the topic of CG is linked with multiple burning and contemporary issues such as risk taking, tunneling, CSR, investment portfolios, board-related issues, financial distress, investment efficiency and much more as compared to the first CG research trend in which the traditionally typical topics have been empirically investigated. Moreover, the findings show that most of the studies are empirical in nature, utilizing a secondary source of data and representing the study under different CG and finance-related theories. However, there are two studies that are qualitative in nature, in one study CG is linked with firm performance and the authors[ 74 ] provided a descriptive evidence on that in a detail literature review manner; moreover, [ 132 ] made an attempt via a qualitative data analysis method that how political connections may help the financing strategies of companies’ to build enterprise. In addition to this, the sample period of the second research trend is richer and representative in both financial and non-financial firms as compared to the first CG research trend. Furthermore, the studies in of the recent past show specific elements of CG such as the board of directors, CEO characteristics, gender diversity, specific ownership type, pyramidal ownership, and some other variables such as affiliation with group or bank, product market competition, disclosure and political connection, etc.

Future prospects

The findings of this study show that aggregate CG is linked and tested with diverse topics, but there is a lack of research related to CG and its impact on Research & Development, Innovation, Marketing strategies, Operational efficiency, Institutional shareholders investment and CG characteristics in family owned and non-family owned businesses. Furthermore, as we know that ownership structure is one of the most important element of CG, ownership structure determines the agency problem, the review of this paper shows that agency problem has not been clearly investigated in the Pakistani context which is famous for family owned businesses and ownership concentrations. Therefore, agency problems especially the Type II Agency Problem must be tackled by the future researchers. Moreover, as we have documented that a bundle of studies in this paper linked CG with firm performance (financial performance) and non-financial performance and corporate social performance is missing in the literature so future studies should focus on this issue too. Additionally, there are State Owned Enterprises (hereafter, SOEs) in Pakistan, and research on it is quite limited; therefore, future researchers may focus on SOEs performance, its governance issues, the role of political connections & CG in SOEs and the impact of SOEs on economy and society. In addition to this, the board of directors is also one of the important element of CG, as we have shown that board characteristics is mostly linked with firm performance and EM examining the monitoring role of the board of directors; however, studies on the advisory role of the board is missing; therefore, future researchers may consider it to address this empirical gap. Moreover, future studies may investigate the questions such as that how the board of directors affects corporate decisions, what are their roles in different types of organizations especially in family and public sectors organizations and what is the impact of independent, and more diverse boards on firm social and non-financial performance. Moreover, future researchers may focus on the issues of executive compensations especially CEO’s, CSR and qualitative research focusing on CG and related variables. Furthermore, as discussed in the previous section that most of the articles have not applied any theoretical framework, thus future scholars are advised through this research study to link-related theories in their research questions to increase the quality of their research. Additionally, the agency issues in concentrated and pyramidal ownership firms is unexplored future researchers may implement research agenda on this side as well. Moreover, the future discussion may be for the future scholars to study the published papers other than two streams, financial and non-financial as well as the multidimensional study and the study of the CG variables meta-analysis with a large sample can be a strong contribution and impact. Finally, future researchers if wanted to write a review paper may consider other Citation databases such as Web of Science, JSTOR, SCOPUS and Science Direct. Footnote 6

The objectives of the study were to research the trends of CG in Pakistan after the promulgation of CCG in Pakistan, to accumulate, consolidate and analyze a stock of CG-related research and give potential CG researchers pathways for future research on CG and associated topics. A systematic literature review approach is adopted in order to achieve the objectives of the study. After a thorough review of 328 volumes of HEC recognized social sciences journals, 93 papers were extracted covering the topics of firm performance, dividend policy, cost of capital and capital structure and earnings manipulation in most of the papers. Moreover, 15 research articles were extracted from the international journals via researching through google scholar, in addition to these research articles, 17 research theses have been analyzed in this review paper downloaded from the HEC Research Repository. In this review paper, 108 research articles have been analyzed consisting of 104 empirical studies, on diverse CG topics from 24 local HEC recognized journals and 14 international journals. The findings of this study show that one article is a systematic review, three articles were non-empirical (descriptive) and 104 were empirical papers along with 17 Ph.D. research theses. In addition to this, this review study has explored various theories that have been applied with agency theory is the most used theoretical framework. Furthermore, through the analysis of this paper four board themes of related to CG has been identified, such as aggregate CG, ownership structure variables, board structure variables and the controlling and pyramidal ownerships. Moreover, through this review paper, two CG research trends have been identified and discussed. The first research trend of CG shows that from 2008–2016 mostly papers link CG with firm performance, dividend policy, cost of capital, capital structure and earnings manipulation; however, in the second research trend which is ranging from 2017 to 2020 shows some emerging issues such as the characteristics of board of directors, ownership structure types more specifically family ownership and issues related with the separation of ownership and control, board diversity, CEO characteristics, client importance in family businesses, CSR, financial distress and much more. Moreover, the findings of this review paper reported that the most used theory in CG research trends is agency theory which is about 65 percent of total reviewed studies; additionally, the other most used theory is resource dependence theory, stakeholder theory and stewardship. By achieving the objectives of this systematic review study, it has contributed a comprehensive CG knowledge to existing CG literature focusing on Pakistan by filling the identified gap of this study.

Limitation of the study

This review paper synthesized systematically a stock of CG-related studies to provide opportunities for research scholars, policymakers and practitioners to get benefit from it. Similarly, like other studies, this review paper has some limitations. Firstly, the keywords used in this review paper are limited due to the scope of the study. Secondly, the time period of this research study is from 2002 to 2020, which may be a potential limitation that needs to be addressed by the future researchers. Thirdly, we have used only google scholar a bibliographic database and the largest academic articles database [ 8 ] to search the CG-related papers focusing on the Pakistani context, while the world renowned academic articles databases such as Web of Science, SCOPUS and Science Direct are skipped in this research study due to the accessibility issues.

Availability of data and materials

We have used secondary sources to complete our study. No new data are used or produced in this study.

This study will review the Journals up-to July 2020, because all new issue will appear online by the end of June or in the mid of July whether the Journal is bi-annually or quarterly.

In addition to footnote 1, the HEC abolished all the X, Y and Z category Journals related to business and economics into one Y-Category under HJRS, there is why the scope of this study is unto July 2020.

https://www.secp.gov.pk/media-center/press-releases/secp-regulation-women-directors-to-more-than-double-in-three-years/ .

The SECP implemented Fourth Code of Corporate Governance in 2019 based on the “Comply and Explain” Principles which has Mandatory, Recommendatory and Comply and Explain Provision. https://www.secp.gov.pk/document/listed-companies-code-of-corporate-governance-regulations-2019/ .

“HEC Recognized National Research Journals of Management Sciences & Economics” on May 04, 2020.

For more future research directions the scholars may get help from the studies as we have reported under the heading of Further Readings.

Abbreviations

Corporate Governance

Corporate Governance Code

Securities and Exchange Commission of Pakistan

Higher Education Commission

Chief Executive Officer

Corporate Social Responsibility

State Bank of Pakistan

Pakistan Stock Exchange

• Earnings management

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This research idea was given by SK, YK and SH have given comprehensive comments and suggestions as well as reviewed and proof read. Furthermore, MA has given insight on theories, findings and developing thematic themes out of the findings. All authors read and approved the final manuscript.

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Khan, S., Kamal, Y., Hussain, S. et al. Corporate governance looking back to look forward in Pakistan: a review, synthesis and future research agenda. Futur Bus J 8 , 24 (2022). https://doi.org/10.1186/s43093-022-00137-5

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Received : 17 June 2022

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DOI : https://doi.org/10.1186/s43093-022-00137-5

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• Corporate governance
• Systematic literature review
• Agency theory
• Firm performance
• Family businesses
• Financial distress and Pakistan stock exchange

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