Volume : 2, Issue : 6, June - 2013

Impact of Corporate Governance on Firm Performance : An Empirical Analysis of IT and Manufacturing Sectors

Pallavi Kapooria, R C Sharma, Deepak Kaul

Abstract :

Corporate governance is instrumental in the development and functioning of economy and exerts a strong influence on resource allocation. It impacts upon the behaviour and performance of firms, innovative activity, entrepreneurship, and the development of the economy as a whole. This paper aims at studying the impact of adopting Corporate Governance norms as listed by Securities and Exchange Board of India on firm performance. The study has undertaken a comparative analysis across two sectors i.e IT and Manufacturing and attempts to assess the relative importance of the various norms. The findings show that among the various corporate governance norms under the scope of the study, the Disclose of Directors’ Remuneration in the Annual Report has a major influence on the performance of organizations across the selected sectors. The disclosure policy gives a certain level of confidence in the minds of the stakeholders and thus facilitated in enhancing the image and the overall performance of an organization.