CORPORATE GOVERNANCE AND THE VALUE OF THE FIRM: AN EMPIRICAL ANALYSIS OF COMPANIES LISTED IN THE JSE SECURITIES EXCHANGE OF SOUTH AFRICA

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Abstract

This study examines the corporate governance characteristics influencing the value of the value of the firm in South Africa (SA). Corporate governance variables including Block shareholding, Dispensed shareholding, Board size, Proportion of non-executive directors and Audit quality were identified from the corporate governance literature. Using panel data of 247-firm years obtained from the annual reports of the 50 largest companies listed on the JSE Securities Exchange of SA, this study found that block shareholding and the proportion of NEDS as the main corporate governance characteristics influencing the value of the firm in SA. The results of this study are important to the King Committee and other corporate governance regulators in SA, in their effort to improve corporate governance practices and probably minimize corporate failure and protect the wellbeing of the minority shareholders. Furthermore, the study contributes to our understanding of the corporate governance variables affecting firm value in developing economies, especially SA.

Keywords: Corporate Governance, Firm Value, Performance, King Report, South Africa

How to cite this paper: Waweru, N. M. (2012). Corporate governance and the value of the firm: An empirical analysis of companies listed in the JSE securities exchange of South Africa. Corporate Ownership & Control, 10(1), 125-136. https://doi.org/10.22495/cocv10i1art11