Branding Good Corporate Governance: A Pathway to Strengthen Investors’ Perception and Brand Equity

Corporate governance has become a crucial issue in both the business and academic world as a result of world-wide financial scandals and lack of trust in corporate practices. There is no doubt that in order to thrive and attain growth in the market, a company must earn the trust of its stakeholders by consistently delivering on its commitments. Directors of the companies thus comprehend the importance of upfront communication with relevant stakeholders to increase their confidence. The authors of this article argue that practicing good corporate governance is not enough in this highly competitive market place; corporate leaders need to market their good corporate governance practices in order to make the company more attractive to investors. This article also contends that the strength of corporate governance relies wholly upon the extent to which it is communicated simply, effectively and unceasingly to its stakeholders. The main objective of this study, therefore, is to explore the importance of branding good corporate governance in order to increase corporate brand equity, attract investors, and capture market share. A structured questionnaire comprising three sections and a total of 34 questions was prepared and surveyed by the authors among respondents residing in Bangladesh and who also have an academic and corporate background, to investigate the potential impact of branding good corporate governance in the market place. High mean values for individual questions and overall section depict that communicating and branding good corporate governance to the stakeholders will not only boost the investors’ confidence but also increase the corporate brand equity, yielding both profitable and sustainable business environment.

companies actively promote their good corporate governance practice. Therefore, one of the objectives of this article is to generate awareness among the corporate board members, CEOs, and the managers in the corporate marketing departments that it is time to market good corporate practices to their investors and customers.

II. RESEARCH OBJECTIVES
The broad objective of this study is to explore the importance of communicating and branding good corporate governance in order to increase corporate brand equity and its positive effect on capturing market share through the increasing investors' confidence.
This study also intends to: 1) Prepare a theoretical framework through understanding the corporate governance, corporate branding and market performance concepts. 2) Identify the importance of communicating the good corporate governance in order to increase corporate brand value. 3) Explore the effect of branding good corporate governance on the creation of sustainable business environment.

III. RESEARCH QUESTIONS
This research aims to answer the following questions: 1) Does communicating good corporate governance increase company's brand equity? 2) Does branding of good corporate governance have any impact on the market performance? 3) Does branding of good corporate governance create sustainable business environment?

IV. METHODOLOGY
This study has been done primarily based on existing literature on corporate governance, brand equity, and sustainable business. In addition to that, a structured questionnaire was prepared and surveyed by the authors to investigate the potential impact of branding good corporate governance in the market place. The questionnaire has a total of 34 questions and divided into three main sections in order to investigate the following: (1) branding good corporate governance and its impact on investors' perception, (2) branding Good Corporate Governance and its impact on corporate Brand Equity, and (3) branding Good Corporate Governance and its contribution to create a more sustainable business environment.

A. What Is Good Corporate Governance?
Corporate Governance is recognized by Organization for Economic Co-operation and Development (OECD) as the relevant processes needed for a corporation to be properly managed and controlled. This often involves resolving conflicts of interest between various stakeholders and ensuring that the organization is managed well, meaning that the processes, procedures and policies are implemented according to the principles of transparency and accountability. Reference [34] define 'corporate governance as the system of checks and balances, both internal and external, which ensures that companies discharge their accountability to all their stakeholders and act in a socially responsible way'.
The art of leading and governing an organization by balancing the needs of the various stakeholders is known as good corporate governance. In other words, good corporate governance encompasses finding ways to align stakeholder relationships and to achieve organizational goals, balancing profits, people and the planet. While rules and regulations deliver significant frameworks for this alignment to take place, effective communication aids these relationships to work. Communicating good corporate governance therefore seems to facilitate clear perception on the existence of good corporate decision-making process in the company [21]. This article argues that branding good corporate governance thus not only enriches a company's relationships with general publics but also with its close stakeholders.

B. Corporate Governance and Brand Equity
Brand equity can be enhanced by cultivating strong brand management with effective corporate governance [30]. A study of top 20 brands in India found significant correlation between overall corporate governance disclosure and brand equity for the year 2016 out of which strength of the Board Committees scored highest [30]. Firms having corporate governance disclosures help enhance their good reputation in the market which in turn raises overall brand equity.
Brand equity always results in differential impact in the firms. Several studies have been done to examine the impact of brand equity on the firm's performance [11], [29], [22]. Firm performance basically means long term profitability with satisfied customer base. Brand equity is found to be highly conducive to enhance greater consumer preference and purchase intentions [11]. Further firms with strong brands not only provide greater returns to stockholders than does a relevant benchmark but do so with less risk [29]. Reference [22] in their study concluded that the process of value creation must start with corporate governance, continue with stakeholders' expectations and finish with shareholders requests. Reference [33] found that companies those have strong brand image build corporate reputation thereby enjoying hosts of economic benefits ranging from significant market value premium to superior financial performance to lower cost of capital.
Good corporate reputation generates better financial performance [16], where as corporate governance is one of the strongest means to achieve reputation hence improving firm's performance [27]. Reference [32] observed that firms with higher level of board activism, higher disclosure standards, effective audit committee, well protected rights of minority shareholders and foreign ownership performed better during crisis. In addition to that, corporate governance disclosures found to enhance buyer's confidence and overall market competitiveness [36]. Considering multifaceted impacts of good corporate governance practices inside-out of the firms and amid huge competition between and among domestic and international competitors in the market, corporations should incorporate governance disclosures as one of the strongest tools in their brand communication strategy which positively generate better confidence and trust of buyer's, investors, employees and society at large.

C. Corporate Governance, Investors, and Financial Performance
Corporate governance acts as a catalyst in generating better financial and operating performance, gaining higher market valuation and eradicating agency problems. A study in Indian market found that firms having better governance not only have a higher valuation in the market but also have lower debt ratio and higher interest coverage ratio [4]. The study also concluded that firms having good governance result in higher return on net worth and capital employed, generating more stable profit margin. Corporate governance disclosures can contribute to improve the market share [36]. Well-governed firms significantly outperform poorly governed firms by up to 15% performance revealed in a study on comparative performance evaluations between well-governed and poorly governed Japanese firms [5]. Further the study stressed that firms having governance provisions that deal with financial disclosure, shareholder rights, and remuneration do positively affect stock price performance.
A study on 14 emerging markets by World Bank found that better corporate governance is highly correlated with better operating performance and market valuation [28]. In addition to that the study found evidence regarding the necessity of firm-level corporate governance provisions that matter more in countries with weak legal environments and therefore providing suggestion that firms can partially compensate for ineffective laws and enforcement by establishing good corporate governance and providing credible investor protection. Maximizing shareholder's value has been one of the key principles of corporate governance which is positively contributing towards US decade-long boom in stock market and overall growth in US economy [26].
Firms having poor corporate governance practices usually suffer a lot. Reference [12] found that firms with weaker corporate governance structure results greater agency problems and worse overall corporate performance. In addition to that, these sorts of firms usually score poor in credit ratings as well [3]. Communicating corporate governance by the firm gives a sense of openness and professionalism which transmit positive statement to all the stakeholders of the firm. Therefore, a firm must consider incorporation of corporate governance into its branding strategy.

D. Corporate Governance and Sustainable Business
Sustainable business models basically focus on ecoefficiency, eco-innovation, and CSR practices where as corporate governance ranking is one of the key indicators for determining sustainability of a company [8]. Firms are getting focused on achieving long term social and environmental sustainability by underscoring the importance of energy conservation, reducing carbon emissions, recycling materials and greater good for the mass people. Corporate governance always works as a safeguard against social and environmental vulnerabilities of a firm by ensuring transparency and accountability to all of its stakeholders.
Effective corporate governance always focuses on long term orientation in the business and it tries to capture customer trust and market reputation. Corporate governance had an important impact on firm performance during the 2007-2008 worldwide financial crisis through firms' risk-taking and financing policies [17]. Corporate governance is considered as a fundamental tool to the continuing operation of a firm and arguably a popular concept of the moment. There has been a host of research over time depicting the relationship between nature of a firm and its corporate governance [13], [20] besides several research studies [10] have shown the benefits of CSR disclosure. Further there is a positive relationship between corporate governance and social responsibility and empirically it is proven that good governance leads to improved CSR performance [35]. All these benefits driven from CSR and corporate governance ultimately facilitate sustainability of a firm.

VI. IMPORTANCE OF COMMUNICATING GOOD CORPORATE GOVERNANCE
Good corporate governance carries vital significance for any organization as it undoubtedly boosts a company's image in the public [31]. Companies therefore not only need to develop strong governance over their business, but also equally they need to communicate it in a meaningful and effective way to the stakeholders. Lack of corporate governance disclosures can create confusion and distrust among the stakeholders, leading the organization to have less acceptability in the society. Communication of good corporate governance can foster support for the corporation in the society by positively influencing opinion, attitude, and behavior of the relevant stakeholders including current and potential customers, leaders and policymakers, mid-level bureaucrats, and others. Moreover, including corporate governance in the corporate branding strategy can help a company to gain competitive advantage in the market, ultimately pleasing the investors. This continuous communication links citizens, civil society, the media, and government, forming a sustainable business environment.

VII. CONCEPTUAL FRAMEWORK
The authors of this article conceptualize that although practicing good corporate governance is associated with better financial performance, company directors need to play a vital role in communicating this to the stakeholders in order to create a better corporate image in the society, hence attracting investors. Moreover, branding good corporate governance results in better customer perception, which ultimately increases the company's brand equity. Thus, communicating good corporate governance to the stakeholders will positively affect the stakeholders' confidence, consequently yielding a more profitable and sustainable business environment. Fig. 1 The Impact of Branding Good Corporate Governance

VIII. DATA AND FINDINGS
The following tables represent the results of the structured questionnaire survey by the authors, depicting the potential impact of branding good corporate governance in the market place. The questionnaire had a total of 34 questions and was divided into three main sections. Table I illustrates the demographic profile of the respondents including their age, education, gender, and occupation. Descriptive statistics reveal that most of the respondents were less than 30 years of age (55%) followed by 35% of respondents aged in the 31 to 40 year age group. As for the gender of the respondents, 31 out of 40 of those surveyed were male (77.5%). In terms of education, 27 out of 40 respondents (67.5%) were Master's degree holder followed by 11 out of 40 who were undergraduate students who might have knowledge on corporate governance from the academic arena or from participating in workshops and seminars. Most of the respondents comprise of service holder (65%) and students (25%). The data from Table II shows the perception of the respondents on practicing good corporate governance and its influence on the investors' decision-making process. Each statement exhibits an acceptable extent of corporate governance to be nurtured. The high mean value of individual questions and the section as a whole elucidate the result in favor of promoting good governance to attract potential investors. Particularly, the question on good corporate governance disclosures generate interest among the potential investors produces the highest mean (4.45) that clearly indicate the importance of corporate governance disclosure among the stakeholders. Reversely, the question that good corporate governance results in building low investment risk perception among the investors yields the lowest mean which is 3.95. The result is evident that the investors have complete trust in practicing good governance which will, in turn, motivate to take high investment risk positively. Thus, the overall section mean of good corporate governance and investor perception produces a high mean (4.17) that also validates the earlier statement. increase the brand equity of the company. The high mean of individual questions reflected the significance of creating strong brand image among the stakeholders through promoting good governance. Among the questions of this section, communicating good corporate governance motivates current buyers to positively influence the potential buyers produces the highest mean value of 4.50, which indicates the importance of disseminating corporate governance practices towards existing buyers, so that they, in turn, influence potential buyers of the product or service, which ultimately enhances the overall company image. On the other hand, the question good corporate governance provides greater authority overcharging premium prices for the company's goods and services produces the lowest mean value of 4.03. This indicates that having good corporate governance may not yield a company to charge premium prices.  Table IV shows the perception of the respondents on practicing the good corporate governance and its contribution in creating sustainable business environment through enhancing company growth potentials, community interest, higher credit rating, and acceptance by the regulatory body. The high mean value for each question and a high section mean of 4.25 represent the significance of good governance practices in order to build a more sustainable business environment. The important question of the section: good corporate governance generates goodwill for the company shows the highest mean of 4.55 which meant the strong perception prevalent among respondent on increasing goodwill through good corporate governance. On the other hand, the question stating good corporate governance minimizes the costs of doing business by getting support from the regulatory body shows the lowest mean value of 3.93. However, the high mean values for most of the questions opine that the corporate governance practices may direct to the sustainability of the businesses in the community.

IX. CONCLUSION
Based on extensive literature review and the findings from the survey, it can be concluded that branding good corporate governance not only increases the brand equity but also the overall performance of a company. Communicating good corporate governance is one way of building confidence in a country's financial markets, appealing investors to risk funds. It results in increasing investors' trust and confidence, augmenting the valuation in the market. Considering the importance of this issue, this article recommends that corporations in addition to the traditional financial disclosure should include good corporate governance into their corporate branding strategy to offer exhaustive answers to the stakeholders' need of information, thus building a sustainable business environment.