THE INFLUENCE OF CORPORATE GOVERNANCE AND CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE: A CASE STUDY OF PAKISTAN’S INSURANCE SECTOR

Abstract

This study investigates the impact of corporate governance and capital structure on the financial performance of insurance companies in Pakistan. By examining key corporate governance practices such as board composition, management accountability, and shareholder rights, alongside the capital structure decisions including debt-to-equity ratios, the research aims to assess how these factors influence financial outcomes like profitability, return on assets, and operational efficiency. Using a case study approach, the research focuses on a sample of insurance firms in Pakistan, analyzing data over a specific period. The findings reveal that strong corporate governance frameworks and balanced capital structures are positively correlated with improved financial performance, while weaknesses in these areas can lead to inefficiencies and diminished returns. The study highlights the need for regulatory reforms and strategic decision-making to enhance governance standards and optimize capital structures in Pakistan's insurance sector for sustained growth and profitability.