THE INFLUENCE OF CORPORATE GOVERNANCE AND PROFITABILITY AFFECTING OPERATIONAL EFFICIENCY OF THE LISTED COMPANIES OF THE STOCK EXCHANGE OF THAILAND

Abstract

Corporate governance is the foundation of all organizations, huge ones. It assures and entrusts stakeholders with the availability of a control system to watch and monitor operations to promote management transparency. This research aimed to examine the impact of corporate governance and profitability on the operational effectiveness of companies listed on the Stock Exchange of Thailand. The information was gathered from the annual registration statement (Form 56-1) and the annual report of 355 firms listed on the Stock Exchange of Thailand over the past three years (2018 - 2020). The Multiple Indicators and Multiple Causes Model was applied to the structural equation model to determine that corporate governance, profitability, and operational efficiency were consistent with empirical data. Corporate governance had a statistically significant direct effect on profitability. Corporate governance had a statistically significant immediate impact on operational efficiency. Corporate governance had a statistically significant direct impact on operational efficiency through profitability. The profitability has a statistically significant direct effect on operational efficiency. The researcher suggested promoting and developing operational processes that emphasize corporate governance concerns to raise the Company's profitability and operational efficiency.