Impact of Corporate Governance on Financial Performance: Evidence from Regression and ANOVA Models

Corporate Governance; Financial Performance; Board Independence; Ownership Structure; Audit Committee; Regression Analysis; ANOVA; Indian Listed Firms; ROA; ROE

This study investigates the impact of corporate governance mechanisms on the financial performance of Indian listed firms using a quantitative analytical framework. Drawing on agency and stakeholder theories, the research examines key governance variables, including board size, board independence, ownership structure, and audit committee characteristics, and their influence on financial performance indicators such as Return on Assets (ROA) and Return on Equity (ROE). The study is based on secondary data collected from the annual reports of 50 Indian listed companies over six years (2018–2023). Descriptive statistics, correlation analysis, multiple regression, and analysis of variance (ANOVA) are employed to analyse the data. The regression results reveal that board independence and audit committee characteristics have a significant positive impact on financial performance, while ownership structure exhibits a nuanced effect depending on the level of concentration. In contrast, board size is found to be statistically insignificant. The ANOVA results further indicate significant differences in financial performance across firms with varying governance structures. The findings underscore the importance of effective governance mechanisms in enhancing firm performance and provide valuable implications for policymakers, corporate managers, and investors. The study contributes to the literature by offering a comprehensive and empirically robust analysis of governance-performance dynamics in the Indian corporate context.