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Corporate governance practices and comprehensive income

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López Quesada, Erika and Camacho Miñano, María del Mar and Idowu, Samuel O. (2018) Corporate governance practices and comprehensive income. Corporate Governance, 18 (3). pp. 462-477. ISSN 1472-0701

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Official URL: https://doi.org/10.1108/CG-01-2017-0011



Abstract

Purpose – The purpose of this paper is to analyze the effect of corporate governance practices on firms’ financial performance, as measured by comprehensive income (CI).

Design/methodology/approach – Using a sample of 237 firms from the Standards & Poor (S&P) 500 index during the years 2004-2009, multivariate statistical analyses are conducted to confirm the authors’ main hypothesis.

Findings – The results indicate that having high levels of corporate governance culture has a positive impact on a measure of firms’ financial performance, namely, CI. Furthermore, they indicate a positive correlation between a higher percentage of external directors and financial performance, and a negative relationship between number of board meetings and financial performance.

Originality/value – The main contribution of this research is that good corporate governance strategies deliver superior financial performance for businesses in terms of CI. This serves as a method of value creation, which is the ultimate goal of a business. In addition to the use of CI as an indicator of financial performance, a unique measure of corporate governance level is tested.


Item Type:Article
Uncontrolled Keywords:Financial performance; Corporate governance; Board of directors; Financial reporting
Subjects:Social sciences > Economics > Industrial management
Social sciences > Economics > Business enterprises
Social sciences > Economics > Finance
ID Code:60248
Deposited On:29 Apr 2020 10:16
Last Modified:07 Jul 2020 11:05

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