2021, Vol. 4, Issue 2

author(s)
Rote Rekha Atmaram

abstract

Background: Corporate governance - from compliance tool to strategic approach, corporate governance has become a key pillar of sustainable business, transitioning from a compliance tool to a strategic boardroom framework that informs organisational performance, valuation, and stakeholder confidence. As companies find themselves operating in more complicated and illuminated contexts, governance is no longer simply a matter of a rule and a monitor; it is now a component of corporate identity and value creation over the long term.

Objectives: In an analysis of the multifaceted impact of corporate governance structures on firm performance and valuation, we are interested in the roles various governance mechanisms (e.g., board composition, ownership structure, and transparency policies) play in determining financial and reputational outcomes. The research also examines the linkages between governance practices and contextual conditions of industry norms and culture dynamics.

Methods: A qualitative multiple case study was used, and data sources included policy and programme documents, semi-structured interviews, and observation. Thematic analysis was used to code and interpret data from a representative sample of publicly listed companies in major sectors. Governance maturity, board diversity, and ESG disclosures were the main variables tested for potential associations with performance measures, such as ROA, capital efficiency, and market value.

Results: The findings reveal a strong positive relationship between the quality of governance and corporate performance. There was consistent outperformance of companies with a well-balanced and diverse board and high disclosure standards across financial performance and investor trust. Contextual differences also surfaced, indicating the influence of sectoral expectations and strategic culture on governance effectiveness.

Conclusion: The research makes a significant contribution by demonstrating that what constitutes effective corporate governance is not a regulatory checklist, but a dynamic and evolving factor that enhances the resilience, market perception, and stakeholder engagement of the firm. For companies wishing to succeed in a stakeholder-oriented, global economy, embracing governance not just as a strategic asset but as an ethical imperative is imperative.