Journal of
Economics and International Finance

  • Abbreviation: J. Econ. Int. Finance
  • Language: English
  • ISSN: 2006-9812
  • DOI: 10.5897/JEIF
  • Start Year: 2009
  • Published Articles: 348

Full Length Research Paper

Corporate governance and firm performance in Pakistan: The case of Karachi Stock Exchange (KSE)-30

Qaiser Rafique Yasser1*, Harry Entebang2 and Shazali Abu Mansor2
  1Faculty of Economic and Business, University Malaysia Sarawak, (UNIMAS), Malaysia. 2Universiti Malaysia Sarawak (UNIMAS), Kota Samarahan, Sarawak, Malaysia.
Email: [email protected]

  •  Accepted: 07 July 2011
  •  Published: 31 August 2011

Abstract

 

This paper examine the relationship between four important corporate governance mechanisms (board size, board composition, CEO/chairman duality and audit committee) and two firm performance measures (return on equity, ROE, and profit margin, PM), for a sample of 30 Pakistani listed firms between 2008 and 2009. The results provide evidence of a positive significant relationship between ROE and PM and three corporate governance mechanisms (board size, board composition and audit committee). The implication of this is that, the board size should be limited to a sizeable limit and board must be a right mixture of executive and non-executive directors. The study, however, could not provide a significant relationship between the two performance measures (ROE and PM) and CEO/Chairman duality. These results are consistent with prior empirical studies.

 

Key words: Corporate governance, firm performance, Pakistan.