Corporate Governance Disclosures and Financial Performance of Listed Firms in Ghana

Abstract

This study seeks to deepen our understanding of how corporate governance disclosure practices influence financial performance of firms listed on the Ghana Stock Exchange. This study reinforces the perspectives of the agency theory, legitimate theory, and stewardship theory in establishing the links between corporate governance disclosure practices and financial performance of listed financial institutions in Ghana. The analysis relied on secondary data collected from the annual report of ten (10) listed financial institutions on the Ghana Stock Exchange from 2007 to 2021. The period of analysis was main driven by data availability. The panel estimation, specifically the fixed and random effects and OLS estimations were used in this study. From the findings of the study, corporate governance disclosures were influenced by board independence and board diversity, however institutional ownership, management ownership and the audit committee could not lead to corporate governance disclosures. Also, institutional ownership, state ownership, management ownership, board size, and the size of the audit committee promote financial performance. However, financial performance was adversely affected by state ownership, board size, board independence, and board diversity and the audit committee. The study recommended that financial institutions should focus on good corporate governance, internal procedures, and strict adherence to the laws and rules controlling the distribution of financial resources to consumers to promote performance. Further studies could employee the GMM technique as it overcomes difficulties of endogeneity with panel data estimation.