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The impact of the recent pandemic on aspects of corporate governance, business, a country's economy, corporate distress, failures, and the general well-being of companies has been a subject of robust discussion. This study was conducted to examine the influence of corporate governance in mediating and managing the risk of corporate distresses and failures before, during, and after the COVID-19 pandemic. The study employed the Panel Autoregressive Distributed Lag (PARDL) model on annual data from 2010 to 2021 to analyze the short-run and long-run effects of the pandemic on corporate governance and sustainability performance. The results from both the short-run and long-run effects are similar, revealing that the estimated coefficient of the debt-to-equity ratio, finance costs, and COVID-19 related costs are negative but significant in the models. Conversely, the coefficients of the current ratio, quick ratio, and board size from both short-run and long-run effects show positive and significant results. Generally, the findings reveal that the coefficient of board size, as a proxy for corporate governance, has a very strong influence in mediating the risk of corporate distress and failure before, during, and after the pandemic period, up to a certain level until the pandemic’s impact was severe on companies’ production, sales, and other operational performance. Based on the above findings, it is recommended that the board of directors and other management boards employ enhanced good governance strategies and improve risk control mechanisms that enhance company performance during the pandemic to help avert corporate distresses and failure rates thereafter.
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