| Abstract: |
Corporate governance has emerged as a central pillar of organisational sustainability and financial performance in the contemporary business landscape. This study investigates the effect of corporate governance (CG) practices on financial performance of UK-listed organisations, drawing upon panel data from FTSE 100 companies over the period 2019–2023. The key governance variables examined include board size, board independence, board gender diversity, audit committee size, and CEO duality. Financial performance is measured using Return on Assets (ROA), Return on Equity (ROE), and Tobin's Q. The study is grounded in agency theory and stewardship theory. Employing OLS regression and correlation analysis on a sample of 100 FTSE 100 firms across five years, the study tests the hypothesis that effective corporate governance practices positively influence firm financial performance. Results indicate that board independence and board gender diversity exert significant positive effects on ROA and Tobin's Q, while board size demonstrates a significant negative relationship with ROA. These findings have critical implications for regulators, institutional investors, and corporate boards in the UK, particularly under the newly enacted UK Corporate Governance Code 2024. |
