Governance mechanisms and corporate performance: A systematic review of the literature

Abstract

The objective of this study is to present the current state of research regarding the relationship between governance mechanisms and the performance of listed companies from 1990 to 2022. Employing a systematic review methodology, we carefully reviewed and examined 80 publications, taking into account their content and context. The publications underwent classification based on theoretical perspectives, research methodologies, and empirical investigations. The findings of our analysis unequivocally reveal the fragmentation of the research field and emphasize the significant knowledge gaps that persist. Undoubtedly, considerable strides have been devoted to investigating the relationship between corporate governance and the performance of listed companies. However, our review highlights several areas that require further research to deepen our understanding. Firstly, delving into the intricate interactions between various corporate governance mechanisms and their impact on company performance is of paramount importance. Further studies are necessary to assess how these mechanisms interact and complement each other. Additionally, new theoretical perspectives need should be developed to enhance our understanding of governance mechanisms and their effect on the performance of listed companies. Existing theoretical frameworks can be further developed and customized to encompass the dynamic changes in financial markets and evolving practices of governance.  Similarly, new research methods can provide more profound insights into the relationship between governance mechanisms and corporate performance.

Keywords: governance, mechanism, performance, listed company, systematic review

JEL Classification: G34, L25

Paper type: Theoretical Research