An Investigation of Corporate Governance Practices of Businesses in Terms of Financial Performance: An Application on Borsa Istanbul Corporate Governance Index Companies

Abstract

This study examines the impact of corporate governance on financial performance in firms listed on the BIST Corporate Governance Index (BIST XKURY) over the 2010–2022 period using panel data analysis. The significance of the research lies not only in investigating this relationship but also in analyzing the role of female representation on board of directors. Corporate governance is evaluated across four dimensions: shareholders, transparency, stakeholders, and the board of directors. Financial performance is measured through ROA, ROE, and EPS, with firm size and leverage included as control variables. The sample is divided by a 25% threshold of female board members. The findings indicate that in firms with ≥25% female representation, the link between board effectiveness and profitability is stronger, highlighting the performance-enhancing role of gender diversity.

Keywords

• corporate governance
• financial performance
• ratings

İşletmelerin Kurumsal Yönetim Uygulamalarının Finansal Performans Açısından İncelenmesi: Borsa İstanbul Kurumsal Yönetim Endeksi Şirketleri Üzerine Bir Uygulama

Abstract

Bu çalışma, 2010–2022 döneminde BIST Kurumsal Yönetim Endeksi (BİST XKURY)’nde yer alan şirketlerde kurumsal yönetimin finansal performans üzerindeki etkisini panel veri analiziyle incelemektedir. Araştırmanın önemi, yalnızca bu ilişkiyi incelemekle kalmayıp yönetim kurullarındaki kadın temsilini de çalışmada incelemesidir. Kurumsal yönetim; pay sahipleri, şeffaflık, paydaşlar ve yönetim kurulu boyutlarıyla değerlendirilmiş, finansal performans ROA, ROE ve EPS göstergeleriyle ölçülmüş, firma büyüklüğü ve kaldıraç oranı kontrol değişkeni olarak kullanılmıştır. Örneklem, %25 kadın üye eşiğine göre ayrılmış, sonuçlar ise bu oranın üzerindeki şirketlerde yönetim kurulu etkinliği ile kârlılık ilişkisinin daha güçlü olduğunu ve cinsiyet çeşitliliğinin finansal performansı artırıcı rol oynadığını göstermiştir.

Keywords

• kurumsal yönetim
• finansal performans
• derecelendirme

References

1. Abdallah, A. A. N., & Ismail, A. K. (2016). Corporate governance practices, ownership structure, and corporate performance in the GCC countries. Journal of International Financial Markets, Institutions and Money.
2. Al-Ahdal, W., Alsamhi, M. H., Tabash, M. I., & Farhan, N. H. S. (2020). The impact of corporate governance on financial performance of Indian and GCC listed firms: An empirical investigation. Research in International Business and Finance, 51, 101083.
3. Amba, S. M. (2014). Corporate governance and firms' financial performance. Journal of Academic and Business Ethics, 8, 1.
4. Arvanitis, S. E., Varouchas, E. G., & Agiomirgianakis, G. M. (2022). Does board gender diversity really improve firm performance? Evidence from Greek listed firms. Journal of Risk and Financial Management, 15(7), 306. https://doi.org/10.3390/jrfm15070306
5. Aziz, S. A., Alshdaifat, E. A., & Al Amosh, H. A. (2025). ESG controversies and firm performance in ASEAN-5: Do board gender diversity and sustainability committees matter? Business Strategy and Development, 8(4), 397–408. https://doi.org/10.1002/bsd2.70094
6. Balestra, P., & Nerlove, M. (1966). Pooling cross-section and time-series data in the estimation of a dynamic model: The demand for natural gas. Econometrica, 34(3), 585–612.
7. Bauer, R., Eichholtz, P., & Kok, N. (2010). Corporate governance and performance: The REIT effect. Real Estate Economics, 38(1), 1–29.
8. Bayraktutan, Y., & Demirtaş, İ. (2011). Gelişmekte olan ülkelerde cari açığın belirleyicileri: Panel veri analizi. Kocaeli Üniversitesi Sosyal Bilimler Dergisi, (22), 1–28.

9. Berle, A. A., & Means, G. C. (1932). The modern corporation and private property.
10. Bhagat, S., & Bolton, B. (2019). Corporate governance and firm performance: The sequel. Journal of Corporate Finance, 58, 142–168.
11. Calder, A. (2008). Corporate governance: A practical guide to the legal frameworks and international codes of practice. Kogan Page.
12. Cengiz, S., & Karabayır, M. E. (2022). Kurumsal yönetim ile finansal performans ilişkisi: Türkiye’de ampirik bir araştırma. Journal of Accounting and Taxation Studies, 15(2), 321–348. https://dergipark.org.tr/tr/pub/muvu/issue/69840/1053921
13. Chakraborty, I. (2023). Uncovering heterogeneity in the relationship between competition, corporate governance and firm performance using quantile regression on Indian data. Asia and the Global Economy, 3(2), 100066.
14. Dimaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.
15. Ducassy, I., & Guyot, A. (2017). Complex ownership structures, corporate governance and firm performance: The French context. Research in International Business and Finance, 39(Part A), 291–306.
16. Flammer, C. (2015). Does corporate social responsibility lead to superior financial performance? A regression discontinuity approach. Management Science, 61(11), 2549–2568.
17. Francis, B., Hasan, I., & Wu, Q. (2015). Professors in the boardroom and their impact on corporate governance and firm performance. Financial Management, 44(3), 547–581.
18. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman.
19. Gerni, M., Emsen, Ö. S., Özdemir, D., & Uzdağlı, Ö. (2012). Yolsuzluğun belirleyicileri ve büyüme ile ilişkileri. In International Conference on Eurasian Economies (pp. 131–139).
20. Ghazali, N. A. M. (2010). Ownership structure, corporate governance and corporate performance in Malaysia. International Journal of Commerce and Management, 20(2), 109–119.
21. Habib, M. A. (2016). Relationship between corporate governance and firm performance: A case study in Bangladesh. International Scholar Journal of Accounting and Finance, 2(1), 11–20.
22. Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206.
23. İbrahim, H., & Samad, F. A. (2011). Corporate governance mechanisms and performance of public-listed family-ownership in Malaysia. International Journal of Economics and Finance, 3(1), 105.
24. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. In Corporate governance (pp. 77–132). Gower.
25. Luckerath-Rovers, M. (2013). Women on boards and firm performance. Journal of Management and Governance, 17(2), 491–509.
26. Ma, Y., Rahim, N. S. B. A., Panatik, S. A. B., & Li, R. (2024). Corporate governance, technological innovation, and corporate performance: Evidence from China. Heliyon, 10(11), e031459.
27. Masulis, R. W., Wang, C., & Xie, F. (2012). Globalizing the boardroom—The effects of foreign directors on corporate governance and firm performance. Journal of Accounting and Economics, 53(3), 527–554.
28. Millstein, I. (1999). Corporate governance reform in Asia. Corporate Governance Advisor, 5.
29. Mohan, A., & Chandramohan, S. (2018). Impact of corporate governance on firm performance: Empirical evidence from India. International Journal of Research in Humanities, Arts and Literature, 6(2), 209–218.
30. Ntim, C. G., & Soobaroyen, T. (2013). Corporate governance and performance in socially responsible corporations: New empirical insights from a neo-institutional framework. Corporate Governance: An International Review, 21(5), 468–494.
31. O’Connell, P. G. (1998). The overvaluation of purchasing power parity. Journal of International Economics, 44(1), 1–19.
32. O’Sullivan, N. (1998). Ownership and governance in the insurance industry: A review of the theory and evidence. The Service Industries Journal, 18(4), 145–161.
33. Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective. Harper & Row.
34. Pham, P. K., Suchard, J. A., & Zein, J. (2011). Corporate governance and alternative performance measures: Evidence from Australian firms. Australian Journal of Management, 36(3), 371–386.
35. Renders, A., Gaeremynck, A., & Sercu, P. (2010). Corporate-governance ratings and company performance: A cross-European study. Corporate Governance: An International Review, 18(2), 87–106.
36. Rizwan, M., Asrar, H., Siddiqui, N. A., & Usmani, W. U. (2016). The impact of corporate governance on financial performance: An empirical investigation. International Journal of Management Sciences and Business Research, 5(9), 11–27.
37. Rodrigues, C. D. J. C. (2010). Corporate governance and performance in public listed, family-controlled firms: An empirical evidence from Italian corporate sector (Doctoral dissertation, Universidade da Beira Interior, Portugal).
38. Shanak, H. S. H. (2024). Does gender diversity moderate the nexus between board characteristics and financial performance? Migration Letters, 21(S3), 307–319.
39. Sheikh, W., & Alom, K. (2021). Corporate governance, board practices and performance of shipping firms in Bangladesh. The Asian Journal of Shipping and Logistics, 37(3), 259–267.
40. Singh, J., Singhania, S., & Aggrawal, D. (2023). Does board gender diversity impact financial performance? Evidence from the Indian IT sector. Society and Business Review, 18(1), 51–70.
41. Ün, T. (2008). Panel veri modellerinin varsayımlarının testi. In S. Güriş (Ed.), Uygulamalı panel veri ekonometrisi (pp. 75–101). Der Yayınları.
42. Vo, D., & Phan, T. (2013). Corporate governance and firm performance: Empirical evidence from Vietnam. Journal of Economic Development, 62–78.
43. Yavuz, S. (2019). Hataları ardışık bağımlı (otokorelasyonlu) olan regresyon modellerinin tahmin edilmesi. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 23(3), 126.
44. Yazgan, K. (2017). Kurumsal yönetim derecelendirmesinin hisse senedi performansına etkisi: BIST kurumsal yönetim endeksi üzerine bir inceleme (Yüksek lisans tezi). Balıkesir Üniversitesi Sosyal Bilimler Enstitüsü.
45. Yerdelen-Tatoğlu, F. (2012). Panel veri ekonometrisi (1. bs.). Beta.