Member who does not have a relevant relationship with the company, is not part of its team, nor participates in the day-to-day of the company.
Published in Chapter:
Corporate Governance and Company Performance: A Comparative Analysisi Across Sectors in Portugal
Eleonora Santos (Centre of Applied Research in Management and Economics (CARME), Portugal), Jacinta Moreira (ESTG, Instituto Politécnico de Leiria, Portugal), and Neuza Ribeiro (Centre of Applied Research in Management and Economics (CARME), Portugal)
Copyright: © 2021
|Pages: 27
DOI: 10.4018/978-1-7998-7596-3.ch011
Abstract
The assessment of the implementation of the corporate governance practices is important because it contributes to the efficient use of resources and, thus, increases corporate performance. However, the practice of CG in Portugal is below European standards due to several issues related to weak legal protection, concentrated ownership structures, and limited information transparency. Using a panel data of 17 firms listed on PSI20, this chapter investigates the impact of the internal CG mechanisms on corporate performance, in 2014-2018. Results show that the size of the audit committee impacts positively on firm performance. However, the number of independent members of audit committee decreases corporate performance in firms operating in services, and ownership of related parties increases corporate performance. Also, fewer leveraged firms are likely to exhibit better performances. This research provides understanding of the relationships between internal mechanisms of CG and corporate performance by comparing results across groups of sectors.