Corporate Governance and Firm Performance: The Moderating Role of Directors Demographic Characteristics


  • Dr. Abdur Rahman Aleemi
  • Dr. Imam Uddin


Corporate Governance, Demographic Characteristics, Firm Performance, Moderating Effects


The financial crises of 2007-8, led to some serious ‘soul searching’ among intellectuals and practitioners about the way financial sector is being regulated and supervised. Similarly, recent mega corporate failures and scandals also warranted scholars and policy makers to re-examine the way companies are governed from more comprehensive and broad perspectives. Hence this study adopts a multidimensional corporate governance index and empirically examines the relationship between corporate governance and firm performance for listed firms on Pakistan Stock Exchange. In addition, we contribute by incorporating the moderating role of demographic characteristics of the executives into the corporate governance framework to enrich and enhance the effectiveness of corporate governance mechanisms for Pakistani firms. We select companies listed on PSX-100 index as a benchmark and a representative index to reflect the conditions of Pakistan Stock Exchange over the period of 2010 to 2016. We find positive relationship between firm performance and corporate governance. Whereas, heterogeneity among the demographic characteristics of board of directors such as average age, functional heterogeneity, average tenure and tenure heterogeneity were found to be negatively affecting the same.”