3. Hence it is hypothesized that: H0e. There should

3.          
Hypothesis

4.1. Hypothesis
Development

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4.1.1.   Insider
shareholding to CFP

According to stewardship and agency theory, senior executives and owners
share similar benefits and need greater utility from alignment of interests. This
study proposes positive relationship between insider shareholding and corporate
performance. As proposed by (Pillai &
Al-Malkawi, 2017) in their study. So, the hypothesis to be tested
is as follows:

H0a: There should be an inverse relationship
between Insider Shareholding and CFP

H1a: There should be a direct relationship
between Insider Shareholding and CFP.

4.1.2.
 Institutional
Shareholdings to CFP

According to
the Institutional theorists, the environment of an institution powerfully
effects the growth of formal buildings of an organization. Institutional
shareholders are the dynamic contributors of intensive care of an organization.
Existing studies by (Erkens, Hung, & Matos, 2012;
Pillai & Al-Malkawi, 2017) posited a significant relationship between institutional
shareholding and corporate financial performance. So, a positive relationship
is assumed, and the hypothesis is expressed as:

H0b. There should be an inverse relationship between Institutional Shareholding and CFP.

H1b. There should be a direct relationship between Institutional Shareholding and CFP.

4.1.3. 
  Governmental Shareholdings to CFP

Institutional
theory also supports the existence of governmental shareholding as an agency
cost alleviation. Earlier studied by (Pillai & Al-Malkawi, 2017) reported a positive relationship between governmental shareholding and financial
performance. So, the hypothesis to be tested will be as follow:

H0c. There should be an inverse relationship between Government Shareholding and CFP.

H1c. There should be a direct relationship between Government Shareholding and CFP.

4.1.4.    Board Size to CFP

Resource
dependence theory postulates that larger board size enhance corporate
performance due to different skills, information, and know-how. As most of the prior
studies suggest negative relationship between board size and corporate financial
performance (Darko et al., 2016). It is considered that firms with smaller board size perform
better than others. So, the hypothesis will be as follow:

H0d. There should be a direct relationship between Board Size and CFP.

H1d. There should be an inverse relationship between Board Size and CFP.

4.1.5.    Duality to CFP

It is
contended that higher agency costs and conflict of interest arises when both the
positions of chairman and CEO held by a similar person (Ehikioya, 2009) and it is recommended that two positions should be employed by
different persons. Furthermore, (Arora & Sharma, 2016; Hassan
& Halbouni, 2013) reported a negative relationship between chairman duality and
financial performance. Hence it is hypothesized that:

H0e. There should be no relationship between Director’s Duality and CFP.

H1e. There should be an inverse relationship between Director’s Duality and CFP.

4.1.6.    Audit Committee Size to CFP

(Ali El & Souad, 2008) suggest that larger size of audit committee can lead to
unproductive governance due to regular meetings, which ultimately increase
expenses. Consequently, it negatively affects firm performance (Darko et al., 2016). also stated that larger audit committee size result in lower
firm performance. So, based on these researcher findings it is assumed that:

H0f. There should be no association between audit committee size and CFP.

H1f. There should be an inverse relationship between audit committee size and CFP.

4.1.7.    Top-20 Shareholders to CFP

Prior studies
inspected the relationship between ownership and firm performance and indicated
that a positive relation exists between ownership concentration and firm
performance (Darko et al., 2016). Hence, it is hypothesized:

H0g. There should be negative association between top-20 shareholders and CFP.

H1g. There should be a positive relationship between top-20 shareholders and CFP.

4.1.8.    Board Independence to CFP

(Detthamrong et al., 2017; Malik
& Makhdoom, 2016; Moradi & Velashani, 2017)
stated positive relationship between independence of board and firm
performance. So following hypothesis is postulated:

H0h. Board
independence should not be related with CFP.

H1h. Board
independence should be positively related with CFP.

Earlier
studies such as (A?an, Kuzey, Acar, & Aç?kgöz,
2016) suggest
that one specific environmental outcome, environmental supplier development, plays
a mediating role influencing the relationship between CSR governance and
financial performance. (Wang & Sarkis, 2017) also suggest that CSR environmental mediates the relationship between
CSR governance and financial performance. So, it is hypothesized that:

H0Z:
CSR activities should not be mediate the relationship between CG and CFP.

H1Z:
CSR activities should be mediate the relationship between CG and CFP.