Abstract:
This study has aimed to investigate the most relevant governance variables which may affect
automobile firms’ performance. The step-wise regression has been applied in stages on
different variables incorporated in the study. The impact of all variables has been analyzed
separately and model fit has been tested for 30 automobile firms. This research divulges that
Chief Executive Officer (CEO) Duality was pointedly related to a firm’s performance,
lending credence to the validity of the Stewardship theory. The number of independent
directors on the audit committee, on the other hand, was found to be pointedly and negatively
associated with firms’ performance and supported the agency theory. In this paper, the firm's
size and age have a significant impact on Earnings Per Share (EPS). This study supports the
stewardship theory and agency theory of corporate governance. The results expand the body
of knowledge by providing empirical evidence that governance variables such as CEO
duality and audit committee independence ratio have an impact on the performance of the
firm. This study presents evidence that the duality of the CEO’s position and the independent
audit committees is significant and of paramount importance.
