A study on the relationship of corporate governance scores and financial and stock performance of the top publicly listed companies in the Philippines for the period 2008-2012

• Main Authors: Cualteros, Paulo M., Dela Rosa, Mary Patricia G., Lecaros, Jose Antonio R., Respicio, Jerrie Mae P., Pinlac, Ricarte Q.
• Format: text
• Language: English
• Published: Animo Repository 2014
• Subjects: Corporate governance > Philippines; Corporations > Finance
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/7151
• Institution: De La Salle University

This study examines the effect of corporate governance practices on company's financial performance and stock performances on the top publicly listed companies for the years 2008 to 2012. Corporate governance scores from ASEAN governance scorecard that are accomplished by the researchers measure each company's corporate governance practices. Ratios such as return on asset (ROA), return on equity (ROE) and profit margin are proxies used to measure financial performance. Meanwhile, price to book value (PBV) is used as proxy for the stock performance. Sample used in this paper are the 30 companies belonging to PSEi for the year 2012. The findings of the study showed that scores under rights of shareholders has a significant positive impact on return on assets. For return on equity, it is significantly affected by the companies' compliance on corporate governance practices that covers the board responsibilities. Meanwhile, there are three areas on corporate governance that significantly affected profit margin. Corporate governance scores for section A and E have a positive impact while scores under D has negative influence on profit margin. Lastly, companies' score under board responsibilities has significant positive impact on price to book value.