Corporate Governance Quality, Ownership Types, and Firm Performance

: Evidence from the UK

Abstract

This thesis investigates the relationship between corporate governance (CG) quality, ownership types, and firm performance and whether ownership types play any role in corporate governance-firm performance nexus. It seeks to achieve four specific objectives. First, to assess corporate governance quality using the UK Corporate Governance Code’s ten recommendations (hereafter The Code) that make board effective from 2010 to 2019. Second, to empirically examine the relationship between corporate governance quality and firm performance. Third, to empirically examine the relationship between ownership types and firm performance. Fourth, to examine the moderating role of ownership types on the relationship between corporate governance quality and firm performance.The results reveal that while female directors, board size, and board age remarkably have positive and statistically significant relationship with all firm performance measures (i.e. Tobin’s Q and ROA), independent board chair has a negative and statistically significant relationship with all firm performance measures. The results also show that duality and board tenure have no relationship, while independent directors, non-British board members, board annual meetings, and board meeting attendance provides conflicting results when measured against Tobin’s Q and ROA. However, after combining all the ten recommendations of The Code to proxy corporate governance quality, the results reveal that, on average, around four of the ten recommendations of The Code have been implemented by the sample firms. Also, corporate governance quality proxied by the constructed CG index has a consistent positive and statistically significant relationship with all firm performance measures.For the ownership types, while the results reveal that banks, pension funds, and the Americanowners have a positive and significant relationship, insurance companies’ ownership indicates no relationship. However, investment advisers, government ownership, management ownership, and the British owners have provided mixed results.For the moderating role of ownership types, the results show that the ownership types such as investment advisers and British owners consistently weaken the relationship between CG quality and all firm performance measures, the remaining ownership types provide varied results (negative or no relationship) depending on the firm performance measure used.

Date of Award	Aug 2022
Original language	English
Awarding Institution	Coventry University
Supervisor	Andrews Owusu (Supervisor), Mohammad Khaleq Newaz (Supervisor) & Panagiotis Andrikopoulos (Supervisor)