Corporate Governance, Compliance and Performance Nexus

Corporate Governance, Compliance and Performance Nexus

Recent high profile corporate collapses highlight the importance of regulatory mechanics among the corporate governance environment, resulting an immense interest from academia and practitioners. Most of corporate governance past literature has focused on developing the causal relationship with firm performance. However, the studies exploring the corporate governance compliance and its implications on organizational performance are limited not only from developed economies but especially from the emerging economies. The Code of Corporate Governance of Pakistan (CCG) is influenced by international advocacy of Anglo Saxon model while de facto realities in Pakistan are quite in contrast from the system of corporate governance adopted.

This exploratory study unfolds dual objectives; it will explore the level of corporate governance compliance of Pakistan Stock Exchange (PSX) listed companies on one hand while it will investigate nexus between CG compliance and firm performance on other hand. To accomplish these objectives, the mixed methodology approach will be employed by collecting the data in two phases. Firstly, semi structured interviews will be conducted from policy makers and key stakeholders of firms. Secondly, the variables derived from the thematic analysis will be employed for investigation of CG compliance and firm performance nexus.

This study is first attempt to explore nexus between corporate governance compliance and firm performance. The findings will contribute to the literature both from theoretical and empirical aspects. It is anticipated that the outcome of the research will assist the legislators and practitioners in developing and evaluation of CG framework and enlighten policy debate for contemporary corporate governance regulatory changes. Furthermore, this exploratory research will also provide new insights for future researchers to investigate the best practices of corporate governance code.

Key Words: Corporate Governance, De facto Realities, Compliance, Performance, Pakistan Stock Exchange