Corporate Governance and Financial Impact

Introduction

In the present-day business environment, building a better image of the company and its operations within the community or the society. In this context, corporate governance forms a major part. Through effective corporate governance policies, companies seek to build trust among the public and show the commitment of the business towards the environment and the society altogether. In this study, focus would be on exploring the potential impact of corporate governance upon the financial aspect of the business in context to capital structure decisions.

Aims and Objectives

The primary aim proposed to be explored in this research study is to analyse the effects of corporate governance upon the capital structure decision making of a business. Correspondingly, the proposed objectives of the study can take the following form.

Analysis of the importance of corporate governance for business units

Understanding the key components of corporate governance that are related to financial aspects such as capital structure

Evaluation of the impact of corporate governance upon the capital structure decision making of business

Research Question

RQ: What are the key factors of corporate governance that influence the decision making of capital structure within business units?

Literature Review

Various researches have been conducted in the past with regard to the selected topic for this study. Notably , as per Kajananthan (2012) has determined that corporate governance has become an integra part of the operations of the companies mainly in context to setting an effective image of the business within the society and the community or in front of the potential stakeholders. However, the study has clearly established the aspect that corporate governance influences the capital structure and overall financial decision making of the business in a comprehensive manner. In similar context, Siromi & Chandrapala (2017) has determined that corporate governance has been a globally recognised issues specially in context to financial decision making. Notably, the study has depicted that corporate governance is attributed to board committee and composition, which is further also involved in capital structure decision making within the business. These aspects would be widely explored in the process of conducting this research study.

Proposed Methodology

The study is proposed to be conducted following a quantitative research method

In this context, research philosophy considered for this research study is positivism

With regard to research approach, deductive approach is to be taken into consideration for completion of the study

In terms of research design this research will consider casual research design

In terms of data collection, the study will consider only secondary sources including journals, literatures and online sources among others.

With regard to data analysis, the study will consider ratio analysis as a part of descriptive statistics for getting appropriate findings for the study

References

Kajananthan, R. (2012). Effect of Corporate Governance On Capital Structure: Case Of The Sri Lankan Listed Manufacturing Companies. Journal of Arts, Science & Commerce, 4 (1): 1-9.

Siromi, B & Chandrapala, P. (2017). The Effect of Corporate Governance on Firms’ Capital Structure of Listed Companies in Sri Lanka. Journal of Competitiveness, 9 (2): 19-33.