Unlocking Stock Market Success: Connecting Chief Financial Officers Influence and Governance Dynamics in Pakistan

Abstract

This study examines the influence of Chief Financial Officers (CFOs) and corporate governance factors on stock returns in Pakistan. Employing a quantitative approach, we analyzed the dynamic relationship between CFO presence and governance elements, including insider shareholding, board size, independence, CEO duality, and audit committee meetings. We used data from the top 30 firms listed on the Pakistan Stock Exchange. The findings reveal that board independence, CEO duality, and audit committee meetings emerge as significant drivers of stock returns, and conventional metrics, such as insider shareholding and board size, exhibit less impact. Importantly, our study elucidates the pivotal role of CFOs in moderating these relationships, emphasizing their indispensable contribution to effective corporate governance. This study underscores the transformative potential of CFOs and emphasizes the necessity of reevaluating corporate governance frameworks to ensure long-term sustainability in the market. These insights have profound implications for policymakers and businesses advocating for a collaborative approach that leverages CFO expertise to unlock sustainable growth and prosperity in Pakistan's stock market.