Corporate governance compliance practices and financial performance of listed companies in the emerging market

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Abstract

This study examines the relationship between corporate governance (CG) compliance and firm performance among companies listed on the Ghana Stock Exchange (GSE), utilising the guidelines of the 2010 Ghana Securities and Exchange Commission (SEC). The study aims to determine whether adherence to the SEC’s (2010) six principles affects the financial performance of listed companies. We gathered financial data from the companies’ and GSE websites for the 33 listed firms from 2009 to 2020. To achieve the research objectives, we developed a CG compliance index based on the SEC’s six core principles and evaluated its impact on firm performance measured by both accounting-based return on assets (ROA) and market-based Tobin’s Q indicators. The results revealed a statistically significant relationship between overall CG compliance and firm performance. Compliance with financial affairs, audits, and disclosures in annual reports emerged as the most influential sub-principles in enhancing performance, following the research of (Owusu & Weir, 2016; Puni & Anlesinya, 2020). The study reveals a positive relationship between CG compliance and the financial performance of Ghanaian listed firms, filling a gap in the literature by addressing how effective CG compliance plays a role in a firm’s performance. These findings contribute to the growing discourse on the efficacy of CG mechanisms in emerging markets and highlight the varying influences of individual compliance elements. These findings offer valuable insights for policymakers and regulatory bodies seeking to strengthen CG frameworks, emphasising the need to prioritise which governance mechanisms demonstrate performance.

Keywords: Corporate Governance Guidelines, Firm Performance, Tobin’s Q, Sub-Recommendations, Ghana

Authors’ individual contribution: Conceptualization — C.Carv. and C.Carm.; Methodology — C.Carv., C.Carm., and E.N.; Investigation — I.F.A.; Writing — Original Draft — I.F.A.; Writing — Review & Editing — C.Carv., C.Carm., and E.N.; Supervision — C.Carv., C.Carm., and E.N.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M0, M48, M49, N47

Received: 22.08.2025
Revised: 29.10.2025; 10.11.2025
Accepted: 28.11.2025
Published online: 01.12.2025

How to cite this paper: Antwi, I. F., Carvalho, C., Carmo, C., & Nkansah, E. (2025). Corporate governance compliance practices and financial performance of listed companies in the emerging market. Business Performance Review, 3(2), 119–133. https://doi.org/10.22495/bprv3i2p10