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.
, 