Corporate Governance and Return on Equity Evidence from Pakistan Stock Exchange

  • Wahid Raza PhD Scholar/ Assistant Professor, Department of Management Sciences Islamia College Peshawar and Government College of Management Sciences Wana South Waziristan, Tribal District, Pakistan
  • Kauser Hayat Assistant Professor, Shaheed Zulfiqar Ali Bhatto Institute of Science and Technology (SZABIST) Islamabad, Pakistan
  • Naveed Farooq Assistant Professor, Institute of Business Studies and Leadership Abdul Wali Khan University, Mardan, Pakistan
  • Hazrat Bilal Assistant Professor, Center for Management and Commerce University of Swat, Pakistan
Keywords: Corporate Governance, Return on Equity, Board Size, Audit Committee, Board Composition


The main purpose of this paper is to study whether corporate governance aspects like board size, audit committee and board composition affect the return on equity (performance) of companies listed on Pakistan Stock Exchange. The data were gathered by purposive sampling techniques from the Balance Sheet Analysis report available on the State Bank of Pakistan website and relevant companies’ websites. A regression model was incorporated to measure the available data for a sample of 50 firms, with a total of 150 years of observations for a period of 2013 -2015. The empirical results indicate that board size, audit committee and board composition are positively associated to return on equity. The result of this study suggests that each organization needs to develop good corporate practices to significantly improve the shareholder wealth in the form of return on equity.  The selected sample is taken from non-financial firms with a small sample size, therefore, in future for more generalizability of the results a study may be undertaken to consider financial and non- financial firms with a large sample size.


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How to Cite
Wahid Raza, Kauser Hayat, Naveed Farooq, & Hazrat Bilal. (2020). Corporate Governance and Return on Equity Evidence from Pakistan Stock Exchange. Journal of Accounting and Finance in Emerging Economies, 6(1), 63-72.