Effect of Corporate Governance

Abstract

The research project was done with an objective of establishing the effect of corporate governance on the financial performance of listed companies in the NSE. The dependent variable used was ROA as a financial performance measure. The independent variables used denoting corporate governance were board composition which was a ratio of the total of NEDs and the independent directors to the total board size, CEO duality, the number of board committees and the number of EDs. A census of all the listed companies was done and secondary data was acquired from the NSE and company websites for the period of study which was 2010-2016. Data was analysed using Eviews software and a regression model was solved using OLS. The analysis of the regression model showed that all the variables had a positive linear relationship with the independent variable but they were insignificant. The findings contradicts other previous findings like Kigotho (2014) hence need for more research.