https://doi.org/10.52131/joe.2023.0503.0163 812 iRASD Journal of Economics Volume 5, Number 3, 2023, Pages 812 – 824 Journal Home Page: https://journals.internationalrasd.org/index.php/joe The Role of Corporate Governance in Firm’s Stock Performance Kiran Farooq 1 , Syed Muhammad Salman 2 , Nasir Ali 3 , Muhmmad Hassan 4 , Atif Aziz 5 1 Assistant Professor, Institute of Business and Health Management (Dow University of Health Sciences), Karachi, Pakistan. Email: kiran.farooq@duhs.edu.pk 2 Assistant Professor, Iqra University, Karachi, Pakistan. Email: smsalman@iqra.edu.pk 3 Scholar, Business Administration, Management Sciences, Mohammad Ali Jinnah University, Karachi, Pakistan. Email: nasir.scholarly@gmail.com 4 Research Scholar, Department of Commerce, University of Karachi, Pakistan. Email: muhammadshasan87@gmail.com 5 Professor, IQRA University Karachi, Pakistan. Email: atif.aziz@iqra.edu.pk ARTICLE INFO ABSTRACT Article History: Received: July 06, 2023 Revised: September 20, 2023 Accepted: September 21, 2023 Available Online: September 22, 2023 The Increasing trend of globalization and stock volatility attracts academic researchers to investigate the causes. As economic globalization has radically increased, there is a need to know more about corporate governance. The shareholder's pattern of firms gives an understanding of corporate control and good governance. These aspects provide the researcher with an explanation of how shareholder behaviour may influence market volatility and valuation. To analyze the impact of the firm’s ownership structure on the market performance of a firm, the ownership structure is decomposed by the percentage of equity. Whereas market to book ratio and stock volatility for market performance. We use the sample of 192 companies, from the period of 2006 to 2018. The study used different suitable statistical techniques such as “correlation, and multiple regression analysis”. The statistical analysis indicates that foreign ownership significantly reduces stock volatility and enhances the firm’s stock valuation compared to its book value. Director ownership is a cause of rising stock volatility and it could not play a significant role in enhancing a firm’s stock valuation. This research will also provide critical recommendations for academics and economic growth. Keywords: Globalization Stock Volatility Corporate Governance Market Performance JEL Classification Codes: F6. G34, L1, R53 Funding: This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors. © 2023 The Authors, Published by iRASD. This is an Open Access Article under the Creative Common Attribution Non-Commercial 4.0 Corresponding Author’s Email: atif.aziz@iqra.edu.pk Citation: Farooq, K., Salman, S. M., Ali, N., Hassan, M., & Aziz, A. (2023). The Role of Corporate Governance in Firm’s Stock Performance. IRASD Journal of Economics, 5(3). https://doi.org/10.52131/joe.2023.0503.0163 1. Introduction 1.1. Corporate Governance in Pakistani Listed Companies After the independence of Pakistan, in 1949, Pakistan adopted “The Indian Companies Act, 1913”. After the broad discussion in 1984, it was revised in specific regards and the Companies Ordinance was stated. In 1997 the Securities and Exchange Commission of Pakistan (SECP) was formed, initially, it had the concern of regulating the corporate sector and capital market. In 1999, its responsibility was extended to the Corporate Law Authority. In March 2002, SECP issued the “Code of Corporate Governance” to strengthen the governing tool and its implementation.