Abstract:

Financial failures as a result of recent scandals in world prime firms have raised the significance of both corporate governance and investigation of the relation between corporate governance and firm performance. The present study is based upon the financial performance evaluation of the firms that both are and are not in Corporate Governance Index according to multi-criteria decision making method. Accordingly, firstly financial performance of Borsa Istanbul (BIST) 30 index firms that both are and are not in XKURY has been evaluated in here. Different from previous studies, not only traditional performance measures (ROE, ROA, ROS, CF/TA) but also value-based performance measures (MVA, CFROI, CVA) are employed together in the performance evaluation. Thus, the financial performance of firms is evaluated by using TOPSIS method, which is one of the MCDM approaches, in the defined problem structure which considers multiple criteria. To determine the weights of performance measures in TOPSIS, CRITIC objective criteria weighting method based on inter criteria correlation is used. In the empirical analysis of the study, 22 firms (10 of them are in XKURY) in BIST 30 index have been evaluated by using the 2014 year’s data of the performance measures and it is attempted to be associated with firms’ status in XKURY and their financial performance results. Consequently, it is revealed that there are no differences among BIST 30 firms that both are and are not in XKURY with regard to financial performance and shareholder value creation. Keywords: Corporate Governance, XKURY, BIST 30, MCDM, TOPSIS, Objective Weighting.

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