Corporate Governance mechanisms and Dividend Payout: An Empirical study of the UK listed firms.

Abstract

In this dissertation we explore the link of corporate governance mechanisms and dividends payout. The corporate governance mechanisms employed are board size, board independence, CEO duality, and managerial shareholding. In addition to the above we used control variables to ensure that the results are accurate. In order to investigate the link between corporate governance mechanisms and dividends payout. We used a sample of UK listed firms in the stock exchange for the years 2015 -2021. This research used an OLS regression to estimate the empirical model and to control the heteroskedasticity and employed a fixed effects of year and industry. Our results show a significant positive correlation between board size, CEO shareholdings percentage and dividends payout. Whiles it showed a negative relationship between board independence, CEO duality and dividends payout. This result is beneficial as it adds to the body of knowledge on how firms can use CG mechanisms to enhance dividends payout and can guide managers in formulating effective dividend policies by considering the factors influencing dividend payout as revealed in this study.