THE IMPACT OF CORPORATE GOVERNANCE CHARACTERISTICS ON COMPANIES’ FINANCIAL PERFORMANCE: EVIDENCE FROM ROMANIA

Abstract

This paper assesses the possibility of a relationship between corporate governance mechanisms, as independent variables, and firm performance measures, as dependent variables. The data was taken from the annual reports of a sample of 66 companies listed on Bucharest Stock Ex- change in Premium and Standard catego- ries during the period 2016–2020. The SPSS statistical program was used to run the multivariate linear regression model on the selected sample. Additional variables were used to control for leverage and size. The results of the study are mixed. Board size, board gender, and board meetings have a positive impact on a firm’s performance, measured by both return on assets (ROA) and return on equity (ROE). CEO duality has a positive and significant impact on a firm’s performance measured by ROA, while a negative and insignificant corre- lation was founded for ROE. Board inde- pendence has a negative and insignificant association with both firm performance measures. The results obtained can help companies to manage their corporate gov- ernance.