The Impact of Corporate Governance Application on Financial Performance of the New Ventures Jordanian Companies

Abstract

This Study aims to investigate the impact of the application of Corporate Governance (CG) rules on the performance of Jordanian listed companies that consider new ventures by analyzing their annual reports for the year 2013 produced by targeted companies or provided by Amman Stock Exchange (ASE). To achieve the objectives of the study, this research adopted a survey to find the extent of application of the rules of CG guidelines issued by the Amman Securities Commission (ASC) as an indicator to measure the application of CG rules. The findings of this study indicate a strong commitment to CG and all targeted companies disclosed information about the Board of Directors of a shareholding company. In regards to General Assembly meeting, a moderate commitment was indicated. Furthermore, the results of this study indicate   a weak application for CG relate to the Shareholders' Rights (lowest among all investigated rules), and the commitment to issues related to Transparency and disclosure is still weak. Finally, the results show that no associations are exist between the company`s performance “ROA, ROE and EPS” and the reporting of the company CG application.

Keywords: Corporate Governance; Governance Practices; Corporate Governance Index; Financial Performance; New Ventures; Jordan.