The Effect of Corporate Governance and Financing Decisions on Ghanaian Listed Companies

Abstract

This study examines the characteristics of board composition and the influence of corporate governance on financing decisions. It also looks at the relationship between corporate governance and performance of listed companies in Ghana. Fourteen (14) companies listed on the Ghana Stock Exchange representing the leading sectors in the Ghanaian economy are selected based on stratified random sampling for the period under study, 2010-2018. Secondary data were obtained from these selected companies and the Ghana Stock Exchange. Panel regression analysis was employed in analysing the collected data. Also, qualitative analysis and descriptive statistics were necessary for a complete well-done research. The results indicate that Ghanaian listed companies pursue higher percentage of non-executive directors, male dominated board of directors and separation between the CEO and chairman of the board of directors. Also the corporate governance variables had a positive correlation with EPS as found in this study. Practicing of good corporate governance result in better performance as there is improved access to financing and lower cost of capital. The debt structure was found to relate positively with the corporate governance variables. This work seeks to understand how the concept of corporate governance and financing decisions reforms work in the Ghanaian corporate environment. Keywords: Capital Structure, Corporate Governance, Financing Decision, Performance of Firms and Return on Asset