Evaluating Impact of Corporate Governance Practices on Profitability of Selected Indian Companies

Authors

Dr. Chetana R. Marvadi (Assistant Professor), S.D. School of Commerce, Gujarat University, Ahmedabad, Gujarat, India.

Abstract

Corporate governance establishes a system whereby directors are entrusted with duties and responsibilities in relation to the direction of the company’s affairs. Profitability indicates how well management of an enterprise generates earnings by using the resources at its disposal. The cement industry in India is currently growing at an enviable pace. More growth in the Indian cement industry is expected in the coming years. This study is aimed at evaluating the influence of corporate governance practices on the profitability of the selected cement companies in India using Multiple Regression Analysis. The study is based on secondary data. The period of 10 years from 2007-08 to 2016-2017 has been considered for the purpose of this analysis. It is found that Firm Size is having negative significant effect on Profitability as measured by EPS, NAPS and NPM. Results shows that selected companies need to focus on long-term and short term investment decision. Effective utilization of fund and proper allocation of resources is required to enhance shareholders value.