The Effect of Corporate Governance on Firm Performance in Family Firms

Abstract

The current study investigates the effect of the corporate governance mechanisms which are (CEO Duality, Board independence and Number & size of board directors) on the firm performance measured by return on assets and return on equity (ROA and ROE) in a family owned firm. A sample of 5 listed firms from 2012-2017. CEO Duality, Board independence and Number & size of board directors are gathered from Annual reports while ROA and ROE are measured from financial statements. SPSS program was used to analyze the results. Regression analysis and correlation methods were used to test the hypotheses between the two variables (corporate governance and firm performance). Results show that the sign of results were insignificant negative and rejected. While the relation between corporate governance and ROA in the sign of results was insignificant negative and rejected. The relation between the corporate governance and ROE in sign of results was insignificant negative and rejected.