Impact of Corporate Governance on Inventory Management: An Empirical Study of Indian Manufacturing Sector

Abstract

Corporate governance is a system structure controlling a company with a view to achieving long-term strategy goals. The study examined the effect of the principle of corporate governance on inventory management in the Indian manufacturing sector. The data have been collected from Prowess database. The data have been analysed with the help of descriptive statistics, correlation matrix, and panel regression model. Descriptive statistics is used for presenting the data; correlation matrix found that there is no multicollinearity found in the dependent and independent variables. The study concluded that the board size is significantly associated with inventory management in high and low market capitalisation firms. CEO duality and ACM (audit committee members) are significantly associated with the inventory. CEO duality is negatively associated with inventory, whereas ACM is positively significantly associated with inventory management. Thus, the study concluded that if the manufacturing sector followed good governance principles then it achieves optimum level of inventory management.

Keywords: Corporate Governance, Inventory Management, Board Size, Board Meeting, Indian

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