Evaluation of relation between quality of governance and financial variables of active companies in Tehran stock exchange market

ABSTRACT: Ranking of the companies in view of quality of governance with the use of benchmark publications from company’s governance constructions and principals cause array of clear data about the company and prepares data necessary for the comparison by the users. Arraies of results of quality of companies’ governance in addition to increasing the general knowledge of users in relation to frameworks and functions of company’s governance causes formation of effective expectations and general demand for advancement of quality of governance in companies. This finally cause increase in transparency and observation of shareholders rights.Research showed thatquality governance of the companies can affect some of their financial variables. This research analyzes the effect of quality of governance on the financial variables (current ratio, instant ratio, market value in relation to book value and company’s size). Therefore 80 companies have been chosen which are active in Tehran stock exchange during the years 1385 to 1388 and with the use of Pearson integration and regression test analyzed. Research results show that there isn’t a meaningful relation between quality governance and companies’ financial variables.