Abstract:
In this research, it was investigated whether the corporate govemance (CG) practicesadopted by the firm have any impact on dividend policy. In Sri Lalkathe presence offamily-run firms, with concentrated ownership, is a reality and we try to understandwhether such firms have any significantly different approach to dividend policycompared to non-family-run companies. The use of debt by firms in their capitalstructure acts as an additional monitoring mechanism and we propose to analyseswhether this has any impact on dividend policy. Articles explores the determinants ofdividend policy of Sri Lankan firms. Thus, firm characteristics which seem to have animpact on dividend policy, like profitability, liquidity, growth, income volatility, sizeand age are investigated. The researcher used a panel of 20 top Sri Lankan listed firms,in terms of market capitalization (over the 5-year period from2014 to 2018 for ouranalysis. We conclude that the CG variables, namely, board size, independent directorsand the proportion of non-executive directors on the board have significant impact onthe dividend policy of the firm. The proportion of cash and cash equivalent to totalasset, used as a measure of firm liquidity, also has an influence on the dividend policy.Growthopportunities have a positive influence on the dividend policy of firms.