Unveiling the Dynamics: Corporate Governance's Impact on Firm Performance in Vietnam's Thriving Market Landscape

The industrial sector plays a crucial role in propelling Vietnam's development, emphasizing the need to analyze the connection between corporate governance frameworks and the performance of listed manufacturers. However, insufficient integration of governance components can impede the implementation of effective business development strategies, turning the governance model into a bottleneck. This study delves into the intricate interplay between board independence, board size, and gender diversity and their impact on corporate financial performance within 92 manufacturers from 2017 to 2022. We discovered that board size has a significantly positive effect on financial performance. Conversely, our empirical analysis revealed notable patterns, showing a negative correlation between board independence and gender diversity with the return on assets (ROA) and return on equity (ROE). Our findings emphasize the need for manufacturers operating within emerging economies to cultivate a nuanced understanding of the complex challenges of navigating environments characterized by diverse political and economic frameworks. We provide theoretical insights into corporate governance and offers practical implications by highlighting the repercussions of the COVID-19 pandemic, such as inadequate support for diverse employees, which can harm corporate financial performance. Therefore, by shedding light on these complex relationships, our study equips stakeholders with actionable insights, including business decision-makers and policymakers within the Vietnamese corporate landscape. This empowers them to make informed decisions in the face of the ever-changing socio-economic landscape, potentially shaping the future of our business environment.