Investigating the Nexus between Corporate Governance and Firm Performance in India: Evidence from COVID-19

Mohd Anas, Ishfaq Gulzar, Mosab I. Tabash (), Gayas Ahmad, Wasi Yazdani () and Md. Firoz Alam
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Mohd Anas: Department of Commerce, Aligarh Muslim University, Aligarh 202002, India
Ishfaq Gulzar: Department of Commerce, Aligarh Muslim University, Aligarh 202002, India
Mosab I. Tabash: College of Business, Al Ain University, Al Ain P.O. Box 64141, United Arab Emirates
Gayas Ahmad: Department of Commerce, Aligarh Muslim University, Aligarh 202002, India
Wasi Yazdani: Department of Commerce, Aligarh Muslim University, Aligarh 202002, India
Md. Firoz Alam: Department of Commerce, Aligarh Muslim University, Aligarh 202002, India

JRFM, 2023, vol. 16, issue 7, 1-18

Abstract: The COVID-19 pandemic has had a dreadful influence on both economic activities and human life, in view of which management has to play a strategic role to focus on effective board leadership in order to optimize firm performance. The present study analyses the role of corporate governance practices in determining firm performance during the pandemic. A total of 151 non-financial companies from 11 diversified industries representing the NIFTY200 index for two years, 2019–2020 (pre-COVID-19) and 2020–2021 (duringCOVID-19), were selected. Paired sample t -tests, panel data regression, and one-way ANOVA were used for the analysis. The findings confirm that there is a significant difference between some corporate governance practices (board size, board independence, board’s female proportion, board attendance, and audit committee size) as well as financial performance (Tobin’s Q) before and during the COVID-19 period. The regression results of the full sample show that only board busyness has a positive and significant impact on ROA and Tobin’s Q. However, after splitting the sample year-wise, board size and audit committee meetings positively affected ROA during COVID-19. On the other hand, board independence had a negative influence. Female directors and audit committee meetings positively affected ROA in the pre-COVID-19 period, while board busyness had a negative influence. The results of one-way ANOVA show a substantial difference in the financial performance among industries.

Keywords: corporate governance; board of directors; COVID-19; financial performance; pandemic (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
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