Corporate governance is a combination of the specific laws and regulations manifested within the organizational behavior. Throughout this study, the advantages of implementing corporate governance structures within a firm are explained along with their positive effect on business performance. The study primarily aims to illustrate how a nation’s perception of the strength of the legal system positively influences financial performance. This relationship is mediated by a variable which is corporate governance. In general, the objective is to demonstrate that the relationship between the legal system and financial performance is affected by a mediating variable that is corporate governance. Prior research supports this topic and provides examples and explanations regarding the importance of corporate governance and the strength of the legal system. The ruling system serves as the law enforcer as it runs the standards of what is acceptable, thus, affecting the capability and performance of an organization.
