The Recent Corporate Governance Code and Company Performance: CEO Tenure as a Moderator

Abstract

This study aims to discern the impacts of the presence of governance committee (GC) and risk management committee (RMC) on company performance, as measured by return on assets (ROA), return on equity (ROE), and Tobin’s Q. Also, it assesses how CEO tenure moderates the influence of these board committees. The sample consists of all non-financial companies listed on the Amman Stock Exchange (ASE) during 2018-2022, totaling 320 firm-year observations. The current research implements multivariate panel data regression techniques for hypotheses testing. The findings reveals positive and significant associations between GC and RMC with company performance proxies, which means that the new Corporate Governance Code (CGC) issued in 2017 contributes to increase the performance of the listed firms on ASE. In addition, the present study furnishes conclusive evidence that, in the context of Jordan, the duration of CEO tenure weakens the positive nexus between CG, RMC, and firm performance. The practical insights gleaned from the findings have substantial policy implications for government agencies, policymakers, board members, public corporation executives, and shareholders. According to the best of author’s knowledge, this study represents the initial empirical exploration in Jordan that investigates the impacts of GC and RMC on firm performance, alongside the moderating influence of CEO tenure.