Connection between Financial Performance and Corporate Governance within Technology Companies Listed

The present research gives an insight on the connection between corporate governance and financial performance, using companies from technology sector listed on NASDAQ, during 2010-2013. Financial performance was measured using as proxy the return on equity (ROE) and the return on assets (ROA). For the corporate governance measures there were selected variables as seniority, duality, and remuneration of the CEO, independence, size and gender diversity related to Boards of Directors. For empirical tests we used multivariate regression models, generalized least squares (GLS) and standard error correction for heteroskedasticity using White's method. The results have confirmed the influence of mixed corporate governance variables on financial performance indicators at the company level. We obtained in both models a positive influence on financial performance from variables age, years listing and CEO's remuneration with bonuses. We obtained negative influence for the variables size / independent members of the Board of Directors and for the CEO duality. The difference between the two models was marked by the positive influence of the percentage of women in the Board of Directors' members and the CEO salary on ROA. The Risk Committed variable had a negative influence on ROE. The control variables had a positive influence only on the ROE model. The final conclusions highlight issues related to human nature such as the lack of fear for penalty, which can lead to the loss of use of rationality and morality. Exploring the corporate governance, there can be identified facts which can lead to dangerous behavior if people have a significant decision-making power.

Vintilă Georgeta, Păunescu Radu Alin (2016). Empirical Analysis of the Connection between Financial Performance and Corporate Governance within Technology Companies Listed on NASDAQ Stock Exchange. Journal of Financial Studies & Research, Vol. 2016, Article ID 629934, 20 pagini, DOI: 10.5171/2016.629934. http://ibimapublishing.com/articles/JFSR/2016/629934/. ISSN 2166 - 000X. Journal indexed in international databases: EBSCOhost: Business Source Complete, ProQuest, Cabell's Directory, Ulrich's Periodicals Directory, Media Finder, J-Gate.