JAGDISH BHIKHUBHAI BHAGAT
SLET, M.PHIL SCHOLAR,S.D. School of Commerce, Gujarat University, Navrangpura, Ahmedabad.
Page No: 8 to 13
ABSTRACT:
Corporate governance is the mechanism through which disclosure of company’s affairs and management action can be communicated to stakeholders. Through good corporate governance, management can obtained trust of stakeholders. The main objective of this paper is to analyse the impact of corporate governance on profitability of selected chemical companies for the period of five years ranging from 2011-12 to 2015-16. Profit after tax is considered as variable to measure the profitability whereas board size, non executive director, director remuneration, audit committee member, director remuneration are considered as variables to measure the corporate governance. Profit after tax is dependant variable while other variables are independent. To analyse the data descriptive statistics such as mean, median are used beside this correlation analysis is also used to find the problem of multicolinearity and multiple regression is used to find the impact of independent factors on dependent factor, t-test, F-test are also used to know the significance of variables. After analysing the data it has been concluded that director remuneration have significant positive impact on profitability whereas board size has significant negative effect on profitability. From the adjusted R square we also found that corporate governance variables have moderate effect on profitability of selected chemical companies.
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