Suchergebnisse

During periods of uncertainty, such as the Covid-19 pandemic, the significance of Corporate Governance (CG) practices is highlighted. The study aims to evaluate the adoption of CG practices in companies listed on the Slovak capital market, with a specific focus on the impact of the Covid-19 pandemic. The data were collected manually from the annual reports of these companies, and covered the period from 2016 to 2021. The Corporate Governance Index, which is developed through Saaty's method, is used to evaluate the overall level of CG implementation. Individual components of the CG Index are also examined. Between 2016 and 2021, the majority of the examined CG criteria and the overall CG Index showed improvement as compared to 2011 - 2015. However, currently, nearly 50% of companies do not disclose information on corporate governance, remuneration, and risk management, and many companies have not succeeded in establishing nomination and remuneration committees or making any progress in terms of board gender diversity. The Covid-19 pandemic has had a moderate impact on some criteria. On the one hand, the information on board member remuneration and risk management has moderately deteriorated. On the other hand, the audit committee has shown improvement. Nevertheless, the pandemic has not significantly affected the overall adoption of CG practices in Slovak companies.

Abstract

Research background: Corporate governance plays an important role in companies' financial performance and its true importance and relevance are revealed during an economic shock, such as the COVID-19 pandemic. In the past, research regarding corporate governance and financial variables focused solely on performance variables such as Tobin's Q and ROA. This assessment completely ignores that corporate governance principles have a broader implication on financial variables than only performance.

Purpose: Our research aimed to determine whether companies with good corporate governance practices were more resilient during the COVID-19 pandemic, measured by the deterioration of various financial variables.

Research methodology: To achieve the aim, in the empirical part of the article, information on companies' corporate governance and financial variables was collected, and based on them, correlation, regression and scatter plot analyses were conducted.

Results: Our correlation, regression, and scatter plot analyses revealed that on both group and individual company levels, companies with higher levels of corporate governance would have their financial variables deteriorate significantly more compared to companies with low levels of compliance.

Novelty: This is the first publication on the given topic. While few publications are assessing the impact of the pandemic on companies using corporate governance, none of these publications have focused on financial variables.