Corporate Governance and Firm Performance: A Review of the Existing Literature

Abstract

Corporate governance refers to the institutional processes through which corporations are controlled, directed and monitored. It has grown more relevant with time due to increasing focus of various stakeholders including investors and regulatory bodies on transparency and sustainable value creation. This review analyzes research studies conducted from 2005 to 2025 regarding the link between corporate governance and performance of firms. A total of 90 sources were used, which include scholarly journal articles, working papers, conference papers, doctoral theses and other research papers. This review focuses on three broad categories of corporate governance factors, namely, board attributes, ownership structure, and board committees. Corporate governance appears to help in monitoring of firms, reduction of agency issues, making good managerial decisions and improving firm performance. However, the findings of the empirical studies are not always consistent. The impact of specific corporate governance structures depends on the type of ownership, institutions, regulatory requirements, firm attributes and business environment. Most of the research papers included in this study are from India because of the growing importance of corporate governance reforms in India and development of Indian capital markets.