THE EFFECT OF CORPORATE GOVERNANCE ON PROFITABILITY: A RESEARCH ON COMPANIES WITHIN THE SCOPE OF BORSA ISTANBUL CORPORATE GOVERNANCE INDEX

Abstract

The aim of this study is to investigate whether the degree of compliance with corporate governance principles has a significant effect on the profitability of companies. The scope of the research consists of 23 companies that are included in the BIST Corporate Governance Index (CGI), whose data can be accessed uninterruptedly between 2013 and 2022 and which are outside of financial institutions. Independent variables in the study, corporate governance rating score, shareholders rating score, public disclosure and transparency rating score, stakeholders rating score and board of directors rating score. Return on assets was taken as the dependent variable. Panel data analysis was used as a method in the research. According to the analysis results; it has been determined that all independent variables have a positive and significant effect on the return on assets. It has been concluded that as the degree of compliance of the companies with the corporate governance principles increases, the return on assets will also increase.