earticle

영어

In this study, we analyzed the relationship between corporate governance and corporate performance by using the corporate governance index produced by a corporate governance service in Korea. The results of this study show that the relationship between the overall corporate governance index and corporate performance (ROA and EBIT/SALES) is highly positive. The overall corporate governance index has five components (protection of stockholders’ rights, board of directors, audit, disclosure, and distribution of corporate income). The distribution of corporate income component is related to corporate performance. Moreover, the analysis of the relationship between corporate governance and future corporate performance shows that the corporate governance index has a highly positive relationship with future corporate performance (ROAt+1 and EBIT/SALESt+1). Additionally, companies listed in the Korean defense industry show a lower ROA than unlisted companies.