Author(s) :

Ruchi Goyal.

Volume/Issue :

Abstract :

The study attempts to investigate the intricacies of airline industry and its dimensions with corporate governance and its relationship with performance of airline companies. Though a few studies have been undertaken on this but none havebeen reported in Indian context and especially with any conclusive empirical evidence. The paper attempts to empirically explore the status of corporate governance and performance measures using secondary data collected from various sources and analyzes the perception of airline shareholders collected through primary data analysis with respect to corporate governance attributes in Indian airline industry

No. of Downloads :

10

KEYWORDS:

corporate governance, performance, airline industry

INTRODUCTION & OBJECTIVES:

Corporate governance practices assist the board of directors to oversee the functioning and management of the company on the whole and thereby fulfilling their responsibilities of safeguarding interests of all the stakeholders including shareholders, employees, customers, suppliers, the government and public in general. It is difficult to achieve excellence without good governance in the long run (Sharma, 2014) and companies having good governance are likely to develop into brands and are able to win confidence of stakeholders and investors (Gupta and Sharma, 2014). The present analysis is based on a survey results which seeks to identify the importance of corporate governance attributes from shareholders; perspectives. For this purpose, a questionnaire survey method was used as an instrument to study the perception of airline shareholders with respect to corporate governance themes selected. The questionnaire included corporate governance variables which were adapted from Adrian et al. (2016) study. The questionnaires were sent to hundreds of airline shareholders but less than one hundred could be gathered. However, with lots of efforts the researcher could finally obtain one hundred (100) responses for the final analysis. In the primary survey of employees, Structural equation modeling (SEM) technique was applied as the researcher had a large sample size of three hundred but here only mere hundred respondents could be obtained in the survey. Therefore, Conjoint approach was thought to be the most appropriate technique for analyzing shareholders; survey. Due care was taken to ensure that the samples selected were representative of the entire population. In the study, the corporate governance of airline companies were measured with the help of board size, board meetings, board composition i.e. proportion of non-executive directors on board, proportion of independent directors on board, audit committee size, audit committee meetings, number of independent directors in audit committee, remuneration committee size, remuneration committee meetings, number of independent directors in remuneration committee, CEO duality, ownership structure i.e. proportion of promoter and institutional ownership. Similarly, the performance of airline companies were measured with the help of Tobin q measure, return on equity (ROE) and return on assets (ROA). The secondary data of the select companies with respect to variables of both corporate governance and performance were collected. The number of passenger airlines in India is very small. Moreover, the availability of the data varied for different companies due to various reasons such as some of the companies are recently listed while few of the companies were listed for many years and few of them are not listed till date. Due to the less sample size, the non-parametric test Kruskal Wallis test is applied. The Kruskal Wallis test being a non-parametric test does not require any assumption; however the results can also not be generalized. The Kruskal Wallis test assumes the following null hypotheses: H01: The level of corporate governance of the select airline companies in India is identical on the select corporate governance measures. H02: The level of performance of the select airline companies in India is identical on the select performance measures.

DOI:

https://doi.org/10.58426/cgi.v1.i1.2019.54-70