The relationship between corporate governance and firm performance in South Africa
Date
2016-08-25
Authors
Mashonganyika, Tinashe Basil
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Abstract
This study examines the impact of corporate governance reforms on performance of publicly listed firms on the Johannesburg Stock Exchange (JSE) in South Africa from 2009 to 2013. The study examines the King III reform in detail, and previous reforms before King III. The variables employed in this study to measure firm performance are return on asset (ROA), return on common equity (ROE) as proxies for accounting based performance measures and Tobin’s Q as a proxy for market based measure of performance.
The results do indicate that corporate governance does have an effect on a firm’s performance. Evidence is presented that suggests that the level of compliance has increased over the period in question from 2009, when King III was assumed. Overall the conclusions are that board size has no impact on firm performance. The hypothesis that board independence impacts on firm performance was rejected among other findings. That being said, there is also significant deviations from the framework that leave room to further develop and/or improve policy. The sample size of 99 is large enough to make inferences about the population
Description
A research report submitted to the University of the Witwatersrand Faculty of Commerce, Law and Management, in partial fulfillment of the requirements for the degree of Master of Management in Finance and Investment
JOHANNESBURG
MARCH 2015