Impact of Corporate Governance on Firm’s Performance: A Case of Micro-Financing Institutions in Sialkot, Pakistan

Abstract

This research paper attempts to evaluate the relationship between corporate governance and performance of the microfinance institutions in Sialkot employing primary source of data. A representative sample of 80 respondents from the top-level management such as board of directors, chief executive officers, managing directors and all the related staff who are responsible for the growth and progress of the microfinance institutions was selected using stratified random sampling technique. The findings of the study revealed that the CEO duality, board independence and ownership structure were the significant variables affecting the firm performance whereas the variables (board size and audit committee independence) showed insignificant impact. The analysis of the research suggested that micro finance institutions should have good and solid governance framework in order to enhance decision making and minimize the possibilities of the management failures ultimately improvement in the firm’s performance.