A Review of the Relationship between Corporate Governance and Organizational Performance through Systems Thinking

Isaac Jerry Kwabena Asare, Yusheng Kong, Mark Yama Jnr Tampuri, Joseph Owusu-Marfo, Emmanuel Boadi Bosompem


There seems to be divergent views on the relationship between corporate governance and organizational performance. These views seem to be inconsistent and inconclusive according to some researchers. Why are the views not convincing? What are the possible causes of the inconsistency? Reviewing relevant literature, it was gathered that various studies approached the subject through different individual attributes of corporate governance with different methodologies in different situations. The works show impact-degree-relationship or directional-relationship or no relationship. It was also found that researchers hardly considered environmental factors in the governance-performance relationship discourse. The study therefore proposes the application of systems thinking perspectives for future studies on the subject. This study corroborates the claim that there exist a relationship between corporate governance and organizational performance. It identifies the lack of standard elements for measuring corporate governance as the possible cause of the inconsistency. Contributing, the study attempted to classify the conclusions of identified works into three assertions to buttress the argument in favor of governance and performance relationship. The study suggests that policy makers and practitioners should take keen interest in not only board attributes but other factors within the organizational environment to identify, analyze, appreciate and address all possible challenges.

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