Corporate Governance Practices & There Impacts on Companies Performance

Abstract

The positive correlation between CG data and company size means that the more transparent the company is, the more volatile the stock price will be in the market. This shows that companies’ increasing awareness about information transparency compared to the past has created trust in investors, which increased the investment wave in potential companies by domestic and foreign investors (due to limited stockholding volume) during the research period. In addition, when the quality and quantity of information are improved, significant changes in stock prices in the market can be achieved by investors who surf the market and hold stocks for a short period. When a company publishes good information about growth opportunities or future investment potential, this increases its attractiveness to other investors and causes its share price to increase. At this point, wave investors will sell the stock. Therefore, the transparent disclosure of information attracts investors, thereby causing stock price fluctuations in the market. This study aims to investigate the relationship between corporate governance (CG) and financial performance in the case of publicly listed companies. The topic is crucial in understanding how effective governance practices can influence the financial outcomes of companies. The study sheds light on the link between CG practice and firm financial performance. It also provides insights for policymakers and practitioners to improve CG practices. In addition, the study examines the relationship between changes in the CG index and changes in financial performance.