Corporate Governance Edifices of Indian Hospitality Businesses

This paper examines the relationship between Corporate Governance and Performance of the organization in Indian hospitality sector considering the corporate governance index. Two hundred and thirty six (236) organizations are selected on the basis of random sampling method from the population of six hundred and thirty two (632) organizations operated and listed in National Stock Exchange in the hospitality sector and data are collected from annual corporate governance and financial reports. The study uses Confirmatory Factor Analysis (CEM) of corporate governance index. Result establishes a significant relationship between Corporate Governance edifice and financial performance. The Corporate Governance index, viz., Board Size (BS), Board Duality (BD), Women Director on Board (WD), Independent Director (ID), Non-Independent Director (NID),Executive Director (ED), Non-Executive Director (NED), Total Committee (Tc),No. of Independent Director in Total Committee (NoIDTc), Return on Capital Employed (RoCE), Leverage, i.e., Debt to equity ratio (Lev), Return on equity (ROE), Return on assets (ROA) and Net profit Margin (NPM) play significant role in organizational performance. This study opens window for future research relating to the extent of Corporate Governance performance due to these corporate governance index including financial performance. Researchers can also test the CRAFTED model (Consistency, Responsibility, Accountability, Fairness, Transparency and Effectiveness of organizations) using the LOGIC (Leaning, Oversight, Guidance, Information and establishing a Culture of trust for the organizations) Principal of Corporate Governance in an organization