Linking Corporate Governance to Financial Performance: A Review of Empirical Studies

Abstract

Corporate governance mechanisms have become an important factor influencing investors’ decision-making, especially in the wake of corporate scandals and regulatory non-compliance. This study aims to systematically review the existing literature examining the relationship between firm-level corporate governance practices and financial performance. A total of 64 relevant studies were identified and analyzed from seven leading academic databases. The review indicates that considerable research has been undertaken in recent years across different regions and industries. At the same time, it identifies several critical research gaps that require further scholarly attention. Based on these observations, the study outlines potential directions for future research to enhance understanding of the governance–performance linkage. By covering literature published between 2000 and 2022, the findings provide useful insights and practical implications for policymakers, regulators, investors, and corporate practitioners.