Does effectiveness of internal corporate governance and top management influence corporate performance? The role of ownership concentration

Ebrahim Mohammed Al-Matari, Talal Fawzi Alruwaili, Mahfoudh Hussein Mgammal, Nasareldeen Hamed Ahmed Alnor and Mohammed A. Al-Bukhrani

International Journal of Managerial and Financial Accounting, 2024, vol. 16, issue 4, 353-379

Abstract: This study investigates the relationship between the efficacy of internal corporate governance and the performance of top management and the corporation. In addition, the current study investigates the moderating influence of ownership concentration on the link between the efficacy of internal corporate governance, top management, and corporate performance. This analysis included listed Saudi Arabian firms between 2014 and 2018. Moreover, this study utilised the OLS regression to examine the direct and indirect link. The findings of this study indicate that the efficacy of internal corporate governance and ownership concentration have a positive and statistically significant relationship with corporate performance (ROA). Furthermore, this study demonstrates that internal corporate governance effectiveness has a negative and statistically significant relationship with business performance (TQ). In addition, this research demonstrates that ownership concentration has a favourable correlation with corporate performance. This study is the first to examine how ownership concentration affects the relationship between efficacy of top management, corporate governance, and corporate performance. It demonstrates the importance of taking the ownership structure into account when assessing the efficiency of top management and corporate governance. In addition, the paper provides a comprehensive synthesis of top management and internal governance procedures.

Keywords: internal corporate governance; ownership concentration; top management; corporate performance; Saudi Arabia. (search for similar items in EconPapers)
Date: 2024
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