Manuscript Title:

IMPACT OF CORPORATE GOVERNANCE DISCLOSURES ON THE FINANCIAL PERFORMANCE OF PUBLIC DEPOSITS ACCEPTING HOUSING FINANCE COMPANIES IN INDIA

Author:

SUGUNA MARGANA, P.SHEELA

DOI Number:

DOI:10.17605/OSF.IO/N5S43

Published : 2022-01-27

About the author(s)

1. SUGUNA MARGANA - Research Scholar, Dept of Finance GITAM Deemed to be University, Visakhapatnam.
2. P.SHEELA - Professor, Dept of Finance, GITAM Deemed to be university, Visakhapatnam.

Full Text : PDF

Abstract

It is standard worldwide that good Corporate Governance disclosure is essential for the effective and efficient management of any organization. Non-Banking Financial Institutions such as Housing Finance Companies (HFCs) are no exceptions, and there has been increasing demand for transparency in the functioning of these HFCs. This research is an attempt to examine the connection between the corporate governance disclosures and financial performance by providing rankings to the selected HFCs in India, which are transparent in their disclosure of information for the benefit of the stakeholders. The empirical analysis was performed on top five public deposits accepting Housing Finance Companies such as CANFINHOMES Ltd, HDFCLTD, LICHFL Ltd, and GICHFL, REPCOHOMES Ltd, which are registered under the National Housing Bank and listed on the National Stock Exchange between the periods 2012-2021. A corporate governance score (CG score) was calculated on parameters such as SEBI Act Clause 49 Listing Agreement. The corporate governance score for the following HFCs are considered as independent variables while Return on assets(ROA), Return on equity (ROE )are considered as dependent variables to measure the financial performance. The firm size of these HFCs were considered as controllable variable. Kendall’s coefficient ranking method was considered to arrive at the rankings, Fixed Effect Regression Model Analysis was performed to study the relationship. The major findings were that HDFCLTD stood first in the list for following the clause 49 regulations in disclosure of information. Secondly it was noted that there was no significant relationship existing between corporate governance disclosure and Return on Assets, while it was noted that there is insignificant relationship between Return on Equity and corporate governance disclosures. The results also indicate that there lies positive and significant relationship between firm size and Return on Assets. To conclude, the impact of corporate governance on the financial performance may vary from one industry to another.


Keywords

Corporate Governance Disclosure, Clause 49 of the Companies Act, Housing Finance Companies (HFC), National Housing Bank (NHB), Reserve Bank of India (RBI).