THE IMPACT OF CORPORATE GOVERNANCE ON THE FINANCIAL PERFORMANCE OF DEVELOPING AND DEVELOPED COUNTRIES /
LEVITICUS MENSAH ; SUPERVISOR, ASST. PROF. DR. MURAD ABDURAHMAN BEIN
- 432 sheets ; 30 cm +1 CD ROM
Thesis (PhD) - Cyprus International University. Institute of Graduate Studies and Research Business Administration
The incorporation process is a legally binding procedure providing conclusive evidence of establishing an independent corporate entity separate from its founders. A company formed through this mechanism is an autonomous legal entity explicitly designed to engage in profit-driven activities. The study focused on three African countries (South Africa, Ghana, and Nigeria) and three European countries (Germany, France, and the United Kingdom). The data for the study were obtained from two main sources. The data on Ghana and Nigerian manufacturing companies was gleaned from the annual report published. The data on South Africa, Germany, France, and the United Kingdom were downloaded from the Thomson Reuters DataStream. The study used a purposive sampling method to select 60 manufacturing companies in Africa, of which twenty-nine (29) were from South Africa, 17 were from Nigeria, and 14 were from Ghana. In the European countries, the study used 31 German, 39 French, and 93 UK manufacturing firms studied between 2010 and 2022 via purposive sampling. According to the study, South Africa has the longest average board tenure at 7.85 years, followed by Nigeria at 4.7 years and Ghana at 3.9 years. The average board tenure was found to have a positive and statistically significant effect on the return on invested capital (ROIC) of the firms in South Africa and Ghana, and a positive and statistically insignificant effect was found for the firms in Nigeria. The study indicated that firms in South Africa have the highest percentage of female directors (24.26%), followed by Ghana (17.8%) and Nigeria (17.3%). The study showed that female representation on the corporate board has a positive and statistically significant effect on all firms’ return on net operating assets (RONOA). In France and Germany, longer board tenure correlated negatively with return on invested capital, contrasting the UK's positive association. Female board iv representation in German firms positively impacted return on invested capital, while it had a negative effect in France and the UK. The study provides policy implications for shareholders, boards of directors, and other stakeholders by enabling them to build confidence in the corporate governance structure of manufacturing companies in the three countries. It is recommended, among other things, that informed compensation strategies be developed in each country to align with company performance without adversely affecting financial outcomes.