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Impact of board diversity on agency costs in the context of agency theory approach: evidence from listed companies in Sri Lanka

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dc.contributor.author Riyad Rooly, M. S. A.
dc.date.accessioned 2024-03-01T09:07:13Z
dc.date.available 2024-03-01T09:07:13Z
dc.date.issued 2021-12
dc.identifier.citation Indian Journal of Corporate Governance 14(2) 2021 pp. 133–153. en_US
dc.identifier.issn 0974-6862
dc.identifier.issn 2454-2482
dc.identifier.uri http://ir.lib.seu.ac.lk/handle/123456789/6947
dc.identifier.uri https://doi.org/10.1177/09746862211045758
dc.description.abstract Effective corporate governance leads the way towards aligning the interest between managers and shareholders. Effectiveness of practicing the corporate governance of companies in Sri Lanka is debatable topic due to the variation between standard and actual practices. This study aims to examine the influence of board diversity on agency costs of companies listed in Sri Lanka as proposed by agency theory. The sample of this research consists of all companies listed in Sri Lanka, exclusive of bank and financial institutions which are practicing unique governance practices issued by Central Bank of Sri Lanka. The final sample consists of 180 companies during the period from 2013 to 2019. This study deployed panel regression analysis to test the relationship formulated in the hypotheses by using the EViews 9 software. The results showed that the board diversity-related variables such as separate leadership structure and presence of non-executive director on companies’ board are appeared to have significant influence on agency costs. Meanwhile, board size does not have direct impact on agency costs. The findings of this study regarding board diversity and agency costs have important managerial implications, that these findings are unlikely to the prediction of agency theory and best practices. Agency theory is not applicable to these companies, since the exiting corporate governance practices increase agency costs. The potential benefits of this study led to re-think the board of directors of the companies, managers, shareholder and the policymakers to re-organise the implementation of best practices. en_US
dc.language.iso en_US en_US
dc.publisher Institute of Public Enterprise en_US
dc.subject Board diversity en_US
dc.subject Corporate governance en_US
dc.subject Agency costs en_US
dc.subject Agency theory en_US
dc.subject Colombo Stock Exchange en_US
dc.subject Theory and practice en_US
dc.title Impact of board diversity on agency costs in the context of agency theory approach: evidence from listed companies in Sri Lanka en_US
dc.type Article en_US


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  • Research Articles [923]
    THESE ARE RESEARCH ARTICLES OF ACADEMIC STAFF, PUBLISHED IN JOURNALS AND PROCEEDINGS ELSWHERE

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