THE EFFECT OF CORPORATE GOVERNANCE ON THE FINANCIAL PERFORMANCE OF COMPANIES LISTED ON THE TEHRAN STOCK EXCHANGE

Abstract

The present study investigated the effect of corporate governance on the financial performance of companies listed on the Tehran Stock Exchange. In this study, the duality of CEO duties and financial performance were considered as corporate governance mechanisms. Indicators like return on assets, return on equity and net operating profit after tax have been used to measure financial performance. The studied period was 2013 to 2017 and samples were member companies of Tehran Stock Exchange. The findings revealed that corporate governance and financial performance of companies listed on the Tehran Stock Exchange had a favorable significant association. With the ROE index, there was a significant positive association between board accountability and corporate performance. With the TQ index, there was a positive significant association between board accountability and company performance, and with the ROE index, there was a positive significant relationship between transparency level and firm performance. There was also a substantial positive link between the amount of transparency and business performance as measured by the TQ index, as well as a significant positive relationship between the audit committee and company success as measured by the ROE index.

Keywords

• corporate governance
• financial performance
• audit committee