Abstract
The current study aims to measure the relationship between corporate governance and financial performance of the company. The study is based on the secondary data collected from the annual reports of the 32 manufacturing companies in the field of consumable goods, FMCG, pharmaceutical and automobile sector. The stepwise regression analysis was performed to measure the impact of seven parameters of corporate governance given in SEBI clause 49 of the listing agreement. The independent variables used in the study are: board composition, shareholding pattern, board level committees, number of subsidiaries, disclosures, other compliances, and role and power of audit committees. It was found from the study that board composition, board ownership or shareholding pattern, disclosures and other compliances are the parameters of the corporate governance which have a positive and significant impact on the profitability of the manufacturing companies of India. It was also found from the study that degree of corporate governance is high among Indian manufacturing companies.
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