A STUDY ON CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE

Abstract

Corporate governance plays a vital role in enhancing the financial performance and long-term sustainability of organizations by promoting transparency, accountability, ethical decision-making, and effective management practices. This study examines the relationship between corporate governance mechanisms, such as board composition, audit committees, ownership structure, and regulatory compliance, and the financial performance of companies. The research evaluates key financial indicators, including profitability, return on assets (ROA), return on equity (ROE), and earnings per share (EPS), to determine the impact of strong governance practices on organizational success. The study is based on both primary and secondary data collected from corporate reports, published financial statements, journals, and stakeholder responses. The findings indicate that companies with effective corporate governance frameworks generally achieve better financial performance, improved investor confidence, enhanced risk management, and greater operational efficiency. The study concludes that adopting sound corporate governance practices is essential for creating sustainable shareholder value, strengthening corporate reputation, and ensuring long-term business growth in a competitive business environment.