The Corporate Governance and Firm Performance: A Review of Existing Empirical Evidence

Abstract

The study aims to review and expand general understanding on the relationship between corporate governance and firm performance. The study is motivated by the current debate on the role of corporate governance on firm performance and sustainability and an assertion that corporate failure is a result of failures in corporate governance mechanisms.  Prior studies have confirmed notable roles played by corporate governance on firm performance. The study has analysed and comprehended key issues of corporate governance and key factors affecting its general mechanism in protecting shareholders’ interest. It further analyses and presents key players of corporate governance which in one way or other have strong influence on the effectiveness of the corporate governance. The study adds on the existing debate and widens stock of literature relating to roles of corporate governance in maximising shareholders’ value. It is considerably of usefulness to investors, practitioners and other stakeholders who are interested with firm’s operations performance in particular.

Key words: Corporate governance, firm’s performance.