Corporate governance and the financial performance of locally listed companies on the Namibia stock exchange.

Abstract

This study examined the relationship between Corporate Governance and Financial Performance of locally listed companies. The study was prompted by Institutional turbulences as a result of ad hoc policy and decision making processes and poor financial performance of locally listed companies. The study aimed at establishing the relationship between corporate governance, Board roles, contingency, board effectiveness and financial Performance of locally listed companies. A cross sectional and correlation study was conducted in the six locally listed companies. Statistical Package for Social Scientists (SPSS) was used and Spearman Correlation Coefficient and Multiple Regression Analysis to determine the magnitude of the relationship and prediction of financial performance respectively were applied. The findings revealed that corporate governance variables namely; board size, had a negative effect on financial performance while policy and decision making had a significant positive relationship with financial performance. Corporate Governance had a significant positive relationship with board roles, board roles had a significant positive relationship with board effectiveness, and contingency had a significant positive relationship with board roles and effectiveness.