The Impact of the Corona Crisis on the Relationship between Corporate Governance and Stock Performance

Abstract

Introduction: One of the crises that has plagued human society recently is the crisis caused by the coronavirus disease. The spread of this virus first affected China’s economy and then caused major financial crises and uncertainty among shareholders. One of the most important ways to protect the interests of shareholders is corporate governance, which increases the company’s value in the long run. Therefore, this research aimed to investigate the impact of the Corona crisis on the relationship between corporate governance and stock performance.Methods: The current study is descriptive research, and the data of 150 companies admitted to the Tehran Stock Exchange from 2017 to 2022 was used as a sample. Regression analysis and correlation coefficient were used for data analysis and hypothesis testing.Results: The findings of the research at a 95% confidence level showed that the coronavirus crisis moderates the relationship between the components of corporate governance, the independence of the board of directors, and institutional investors with stock performance, whereas it does not have a moderating effect on the relationship between some other components of corporate governance, such as the size of the board of directors and dual duties of the CEO with stock performance.Conclusion: By increasing some corporate governance mechanisms, such as the board of directors’ independence and institutional ownership, the negative impact of the Corona epidemic on stock performance may decrease.

Keywords

• professional corporations
• corporate governance
• stock performance
• commerce
• covid-19