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Corporate governance as a mechanism shares its evolution with the corporate form of
organization. It, however, has garnered eminence and limelight in recent times of heightened
competition in the globalized era. The issues of corporate governance have been widely
accepted and professed as a means of attaining competitive advantage and sustaining in
dynamic environments highlighted by international trade, quality commitments, awakened
stakeholders and vigilant regulators. The jolting corporate scandals world over and resulting
financial tsunamis have also brought corporate governance to the forefront. The gaffes so
spotlit had regulators on their toes, resulting in strict codes of governance in different
countries. These regulations were put in force to strengthen the corporate performance and
overall economies, thus securing the money of investors and trust of all stakeholders.
Corporate governance, amidst these developments, has emerged as a prolific research area.
A growing body of research is being conducted to examine the structures, effectiveness and
performance linkages of these corporate governance mechanisms. Empirical investigation into
the association of corporate governance to firm performance using different measures has been
a dominating area for research in the field of finance. Studies with focus on ownership patterns
and structures, board structures, directors’ abilities, experience and diversity, disclosure
practices have been endeavored in different countries with different samples, the focus largely being on Western and developed countries. The results in different regions and settings have
failed to establish any consistency leaving room for further investigations. One of the recent
research areas in corporate governance is Initial Public Offering (IPO). IPO underpricing, which
remains an unresolved riddle, has found many empirical examinations and explanations.
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