The Relationship between Good Corporate Governance and the Performance of Companies in the SET50 Index on the Stock Exchange of Thailand

Abstract

The objectives of this research are: (1) to examine the relationship between good corporate governance and the return on assets (ROA) of companies listed in the SET50 Index on the Stock Exchange of Thailand, and (2) to investigate the relationship between good corporate governance and the return on equity (ROE) of companies listed in the SET50 Index on the Stock Exchange of Thailand. This study employs a quantitative research approach. The sample consists of 44 companies listed in the SET50 Index, which complete financial data available from 2020-2022. The sample selection was conducted using purposive sampling, ensuring that only companies with full data throughout the study period were included. The research utilizes secondary date sources, which were collected and recorded using specialized financial software. The dataset includes information from the Stock Exchange of Thailand’s database, annual financial reports (Form 56-1), and corporate governance assessment reports of listed firms.  The data were analyzed using descriptive statistics, including mean, standard deviation, minimum and maximum values, as well as inferential statistics, employing Pearson’s correlation coefficient to test the hypotheses.

The research found that (1) Good corporate governance is found to have a weak negative correlation with return on assets (ROA), with a correlation coefficient of -0.187 at a significance level of 0.05., and (2) Good corporate governance shows no statistically significant correlation with return on equity (ROE). Contributions and Implications; This study provides valuable insights for investors seeking to make informed investment decisions regarding companies listed in the SET50 Index on the Stock Exchange of Thailand. Additionally, corporate executives should prioritize good corporate governance to enhance investor confidence and promote sustainable business growth.