Abstract:
Purpose: This study mainly focuses on examining the impact of board structure,
ownership structure and corporate control governance mechanisms on firm
performance of listed companies in Sri Lanka.
Design/methodology/approach: Study used the sample of 100 non-financial
companies listed in Colombo Stock Exchange for 10 years 2014 to 2023 using
stratified random sampling, and collected data analyzed using SPSS and Stata.
Findings: The study found that firm performance is negatively impacted by board
independence, the frequency of board meetings, and CEO duality. In contrast, having
female directors on the board is associated with better firm performance.
Concentrated ownership positively affects performance, while corporate ownership
tends to decrease it. Additionally, a larger audit committee positively influences firm
performance, whereas more frequent audit committee meetings are linked to poorer
performance.
Practical implications: This research explores how governance variables affect firm
performance. It suggests that policymakers could improve corporate governance
frameworks with mandatory requirements to enhance firm performance. Additionally,
the findings provide a basis for future academic research on governance and
performance.
Research limitation: This sample covers 17 industries, excluding banking, finance,
and insurance sectors, and represents about 35% of the population of 280 companies.
Originality value: The study revealed that in Sri Lankan firms, board size does not
significantly affect performance. Companies are increasingly separating the roles of
CEO and chairman, which positively impacts performance. Enhancing board
diversity, especially with more female directors, could improve firm performance.
Concentrated ownership and institutional shareholding may hurt performance. Larger
audit committees offer better oversight, but frequent meetings can harm performance;
thus, fewer, strategic meetings are recommended.
