Independence of corporate governance and its relation to financial performance


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Most studies in the area of corporate governance measure certain characteristics and the effects on financial performance; however, other authors only focus on profitability and do not analyze financial performance in all its dimensions; this is relevant because in some situations the government corporate governance can influence performance measured by liquidity, solvency or activity. The aim of the study is to relate the independence of corporate governance and the financial performance of non-listed companies using econometric techniques. This process was carried out by collecting primary information for the independent variable and secondary data for the dependent variable; the independence of corporate governance was measured by applying a confirmatory factor analysis to data collected through a survey, while the financial performance was measured through average Z factors created for liquidity, solvency, profitability and activity indicators. As a result, it was found that the independence of corporate governance influenced financial performance, but this relationship was statistically significant only with solvency and activity variables. As a result, it can be seen that there is a direct relationship between corporate governance independence and financial performance, in such a way that if the perception of board independence increases, financial performance can increase positively.

An acknowledgment to department SINDE from University Catholique Santiago of Guayaquil, who helped with the necessary resources to conduct this research.

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    • Table 1. Description of variables
    • Table 2. Financial development indicators
    • Table 3. Univariate normality test – skewness and kurtosis
    • Table 4. Mardia’s multivariate normality test
    • Table 5. Goodness of fit indices for the IGC construct
    • Table 6. Comparison of liquidity estimates
    • Table 7. Comparison of management estimates
    • Table 8. Comparison of profitability estimates
    • Table 9. Comparison of solvency estimates
    • Data curation
      Cesar Freire, Felix Carrera
    • Formal Analysis
      Cesar Freire
    • Methodology
      Cesar Freire, Felix Carrera
    • Project administration
      Cesar Freire
    • Supervision
      Cesar Freire
    • Validation
      Cesar Freire, Felix Carrera, Paola Auquilla, Gabriela Hurtado
    • Writing – review & editing
      Cesar Freire, Paola Auquilla, Gabriela Hurtado
    • Conceptualization
      Paola Auquilla, Gabriela Hurtado