Impact of Corporate Governance Practices on Firms Performance A Comparative Study Between India and Gulf Countries

Abstract

newline Corporate Governance (CG) is a relevant issue in academic writing, finance, and accounting field due to the chain of financial scandals around the world. Corporate collapses of the recent past, which involved companies such as Polly Peck (1991), Adelphia (2002), Commerce Bank (1991), Enron (2001) World Com (2002), etc. due to the weak governance and control systems. Polly Peck (1991) was the first UK company to collapse, while Enron (2001) was the first major American company to cease existing due to shaddy corporate governance practices. (Mallin, 2013). The failures and scandals of major world firms irritated financial markets and resulted in huge losses for various stakeholders such corporations, primarily shareholders (Bayrakdaroglu et al., 2012). Countries responded to these debacles by enacting laws and regulations aimed to improving corporate disclosure and governance practices (Chhaochharia and Laeven, 2009). The issues of CG has been of significant relevence in the recent period. It ensures the safety of the business reports through full transparency in the disclosure procedures and carries the moral dimension of the accounting practices along with it. It will lead shareholders and companies to apply rational and sound decisions; and if implemented properly, it will be helpful for businesses to attract investments to finance their production process. On the whole, CG is about how the corporation is directed, managed, controlled and held accountable to their shareholders.