Corporate governance and its impact on firm value and financial ratios: An evidence from publicly-listed companies in the Philippines

• Main Authors: Cubilla, Rona Trisha N., Fajardo, Ma. Veronica N., Gonzales, Janine B., Santos, Jeanny Kristin Z.
• Format: text
• Language: English
• Published: Animo Repository 2013
• Subjects: Corporate governance; Ratio analysis; Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/10627
• Institution: De La Salle University

There were numerous accounts of corporate fraud throughout the decade. The control and monitoring of management power were put into concepts however, this was not given emphasis and importance. This control of management power is called Corporate Governance. While it is true that profitability is the primary goal of any company, good governance is also essential for its survival. This paper intended to determine the impact of corporate governance practices of selected Philippine publicly-listed firms in the industrial, mining and oil, property and services to overall firm performance through financial ratios and firm value from 2008 to 2011. This paper also intended to evaluate the effectiveness governance regulations by determining if there were an improvement of ratings and an increase in corporate governance scores provided by the Institute of Corporate Directors (ICD) and which of its sub-principles were the mostly complied, least complied, and caused changes in such scores. The results, through descriptive statistics, showed that over the four-year period, there was continued improvement of the average corporate governance scores of the 30 companies from 2008 to 2010 but there had been a slight decline for 2011. The results also showed that Disclosure and Transparency was mostly complied, while Role of Stakeholders was the least one. The panel data regression barely showed a significant effect of corporate governance scores to firm value and financial ratios. The only exceptions which showed significant effect were Role Stakeholders to Return on Equity and Firm Size to Firm Value.