Corporate governance and financing decisions of Ghanaian listed firms

Purpose - This paper seeks to examine the relationship between corporate governance and the capital structure decisions of listed firms in Ghana. Design/methodology/approach - Multiple regression analysis is used in the study in estimating the relationship between the corporate governance characteristics and capital structure. Findings - The empirical results show statistically significant and positive associations between capital structure and board size, board composition, and CEO duality. The results generally indicate that Ghanaian listed firms pursue high debt policy with larger board size, higher percentage of non-executive directors, and CEO duality. The results also show a negative (though statistically insignificant) relationship between the tenure of the CEO and capital structure, suggesting that, entrenched CEOs employ lower debt in order to reduce the performance pressures associated with high debt capital. Originality/value - The main value of this paper is the analysis of the effect of corporate governance on financing decisions from the Ghanaian perspective.