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Corporate governance ratings and financial performance: evidence from Australia
Journal article   Peer reviewed

Corporate governance ratings and financial performance: evidence from Australia

Peter Baxter
International Journal of Corporate Governance, Vol.5(3/4), pp.178-196
2014
url
https://doi.org/10.1504/IJCG.2014.064723View
Published Version

Abstract

Law corporate governance ratings financial performance board of directors audit committees Australia
This study investigates the relationship between the corporate governance ratings of Australian publicly listed companies and their financial performance. The data used in the study includes all companies listed in the Horwath Corporate Governance Report across the years 2006 to 2008. Company financial performance was measured by three alternative variables, while the main independent variables of interest were the company rankings and star ratings from the Horwath Report. The results of the study provide consistent evidence over the three years that companies with higher quality corporate governance have higher levels of financial performance. The study therefore makes important contributions to the existing literature and will be of value to investors, companies and regulators in assessing the extent to which a corporate governance ratings system explains variations in company financial performance.

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