Strong corporate governance leads to higher dividends for shareholders.
The quality of a company's corporate governance affects how much and how often they pay dividends to shareholders. Companies with better governance tend to pay higher dividends. This is because strong governance helps prevent managers from taking too much cash for themselves, leaving less for shareholders. Even after considering factors like company size and profitability, the link between good governance and higher dividends remains clear. This shows that how well a company is governed can directly impact decisions like dividend payouts.