How Corporate Governance Mechanisms Improve the Financial Performance of Shareholding Companies

Abstract

This study aims to investigate the impact of good corporate governance on firms' financial performance. First, this study explores the corporate governance emergence. In this part, we introduce the corporate governance concept, and after that, we highlight the principal motives giving birth to this concept, its importance, and its objectives. Second, the study will focus on corporate governance practices. In this part, we examine corporate governance's principles, implementation, and determinants. Third, the paper will examine the relationship between corporate governance and firms' financial performance. In this part, based on existing research, we will clarify the role of corporate governance in enhancing firm performance. Finally, we summarize how corporate governance plays a significant role by attracting the interest of potential investors, suppliers, and other stakeholders, thus, the economy's growth.