Abstract
Nowadays a great deal of attention is paid to corporate governance (CG). Frequent takeovers of ownership rights by management bodies led to a need for business owners to establish clear rules for business management and compliance monitoring. The aim of this paper is to examine the relationship between selected characteristics of the governance process and the ability of governing bodies to perform their core tasks, as well as to model and predict the impact of the selected characteristics of the governance process on the company’s financial performance, measured by the year-on-year change in return on equity. The respondent sample consists of members of randomly selected top management entities with their headquarters in Slovakia. A total of 132 subjects participated and answered questions in the survey, 54% of which were joint stock companies, 36% were limited liability companies and 10% were respondents from cooperatives. Data were personally collected by a questionnaire survey conducted during 2019. To verify the assumptions and success of the formulated model, correlation analysis, binary logistic regression and other relevant tests were used. The results show that each of the examined board process attributes significantly affects at least one board performance attribute. All significant correlations have a positive value. Independent variables in the ROE regression model increased the estimation rate of ROE change from 54.5% to 93.9%. The model is applicable in the CG practice and allows the prediction of changes in ROE with respect to ongoing governance processes. AcknowledgmentThis paper has been supported by the Scientific Grant Agency of Slovak Republic under the project VEGA No. 1/0749/18 “Research on the application of corporate governance principles in companies in Slovakia”. The authors would like to express their gratitude to the Scientific Grant Agency of The Ministry of Education, Science, Research and Sport of the Slovak Republic for financial support of this research and publication.
Highlights
A few decades ago, the public was almost unaware of the concept of corporate governance
The aim of this paper is to examine the relationship between selected characteristics of the governance process and the ability of governing bodies to perform their core tasks, as well as to model and predict the impact of the selected characteristics of the governance process on the company’s financial performance, measured by the year-on-year change in return on equity
The results show that each of the examined board process attributes significantly affects at least one board performance attribute
Summary
A few decades ago, the public was almost unaware of the concept of corporate governance. Scandals and financial crises of recent years have made this term quite commonly used in the business environment, and amongst the public. This concept, which used to be mostly the subject of closed-door discussions, has continuously turned into a public concern. The basic principles of good corporate governance include support and provision of transparent and efficient markets, protection and facilitation of exercising the shareholder rights, guarantee of fair treatment of all shareholders, as well as a guarantee of timely and accurate disclosure of all materials that are related to the company
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
