Corporate governance and stock prices

Abstract

There are more and more evidences of the relation between corporate governance and firm performance. Many governance attributes (e.g. CEO salary structure) can affect firm performance. This research aims to synthesizes some perspectives on corporate governance as well as introduces some tools for measuring corporate governance. The article also explores the linkages between stock price and corporate governance quality via regression analysis. The findings reveal that corporate governance significantly affects the share prices of listed companies and hence is a very important predictor for share price in the stock market.