Abstract:

Corporate governance is an important approach that promotes professionalism in business management. However, corporate governance not only improves the administrative structure and functioning of the applied enterprise, but also improves the management culture in a country. Therefore, there is a need for studies examining corporate governance from different dimensions. As a matter of fact, in this study, the question of whether corporate governance practices have an effect on the financial success of businesses has been examined. The aim of the study is to summarize the issues of corporate governance and financial performance at a conceptual level and to present new evidence to the literature explaining the relationship between corporate governance and financial performance with an empirical application. For this purpose, 2017-2019 data of 60 companies operating in BIST, 30 of which are included in the corporate governance index and 30 of which are not in the index, were used. The findings obtained as a result of the analysis are as follows: There is no significant difference between the groups in return on assets (ROA), return on equity (ROE), market value book value (PD/PD) and Tobin's Q ratio variables. In terms of price-earnings ratio (P/E), there is a significant difference in favor of the second group. In terms of leverage (LEV) ratio, there is a significant difference between the averages included in the index in favor of the first group. As a result, according to the findings, being included in the corporate governance index does not increase financial success. However, it should not be overlooked that the corporate governance approach contributes directly and indirectly to the organizational culture of the enterprises and increases the credibility of the enterprises.

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