Impact of corporate governance on firms reputation

Abstract

The impact between corporate governance and a firm's reputation is profound and intricate. Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled. It encompasses the relationships among stakeholders, including shareholders, management, board members, employees, customers, suppliers, and the community at large. The major objective of the study is to find out the impact of corporate governance on firm’s reputation. To some extent, the specific of the studies are to examine the relationship of corporate governance on firm’s reputation, to assess the impact of discipline, transparency, independence, accountability, responsibility, fairness and social awareness on firm’s reputation and to examine the relationship of discipline, transparency, independence, accountability, responsibility, fairness and social awareness on firm’s reputation. This study adopts a descriptive and causal research design to describe the characteristics of the variables used in this study with a clearly phrased structured questionnaire to communicate with participants and avoid misunderstandings. The sample size of the study is 350 respondents. The convenience sampling method was used to determine the samples. Descriptive, correlation and regression methods of analysis are used in the study. The data are analyzed by using Statistical Package for Social Science (SPSS). The descriptive statistics include mean, standard deviations; minimum and maximum values of the variables are used to describe the characteristics of respondents. The study found positive impact of Transparency, Interdependency and Accountability on firm’s reputation. Similarly, the study also found positive impact of Fairness, Social Awareness, Discipline and Responsibility on firm’s reputation. The study demonstrates that corporate governance is integral to a firm's reputation. The benefits of strong governance extend beyond compliance and risk management, permeating every aspect of stakeholder relationships and financial performance. Firms that adopt and maintain high standards of corporate governance are better equipped to build and sustain a positive reputation, ultimately driving long-term success and stakeholder value. Conversely, lapses in governance can lead to significant reputational damage, underscoring the critical xiii importance of governance in corporate strategy and operations. This analysis reaffirms that robust corporate governance is not merely a regulatory requirement but a strategic asset essential for achieving and maintaining a stellar reputation in the competitive business landscape. Though the majority of companies and consumers share the opinion that companies are liable to disclose their internal corporate information to public, the independence, responsibility & social awareness has strong governance control are recognized as significant factors in corporate reputation