Investors are willing to invest in companies that are ethical and transparent in their dealings. Hence, the management's commitment to high governance standards is a magnet in attracting much-needed external funds for the company. Moreover, the theoretical viewpoint of well-known theories like the agency and the pecking order theory has also propounded that adopting a suitable governance mechanism helps to gain investors’ confidence by ensuring transparency in management dealings. Although numerous studies have explored the effect of ownership structure on firm performance and corporate governance, research studies that consider the combined effect of corporate governance, ownership structure, and firm performance are rarely seen. Therefore, the present study examines the combined effect of ownership structure and good governance features (board diversity and multiple directorships) on firm performance. The study will make a novel contribution by studying the impact of foreign institutional investors and debt and equity in the ownership structure. The study's sample size comprises 500 BSE-listed firms whose performance is analyzed over ten years. The study found that board diversity and busyness led to a slight reduction in the significance level of the positive impact of equity on market performance. The study will provide valuable insights for policymakers and professionals in the field, keeping them engaged and interested in potential improvements to the institutional environment. Furthermore, the findings suggest that flexible rules should be applied to increase the inflow of equity participation by foreign institutions and domestic investors.