Abstract:
Purpose: This study aims to investigate the relationship between emerging trend in
corporate governance and risk management practices in Sri Lankan companies,
focusing on how governance frameworks influence risk management effectiveness
and overall organizational stability.
Design/methodology/approach: This study adopts a quantitative approach. Primary
data is collected through a survey of executive officers and corporate managers from
listed companies, with a non-contrived study setting. As a cross-sectional study, data
is gathered at a single point in time, and quantitative data are used to test the research
hypotheses.
Findings: The study reveals that corporate governance mechanisms significantly
impact risk management practices. Specifically, board attributes demonstrate a
significant and positive association with effective risk management, indicating that
well-structured boards contribute to stronger risk oversight and control. Similarly, the
audit committee's influence on risk management practices is both significant and
positive, highlighting the committee's essential role in enhancing risk governance.
Conversely, the ownership structure shows a negative but insignificant relationship
with risk management practices, suggesting that ownership patterns may not
meaningfully affect risk management effectiveness in this context
Practical implications: Enhancing board structures and fostering effective audit
committees can significantly improve risk management practices among listed
companies in Sri Lanka, promoting financial stability and accountability. Given the
minimal impact of ownership structure, regulatory efforts may be more effective if
focused on strengthening governance frameworks rather than altering ownership
patterns.
Originality value: This study provides unique insights into the distinct roles of board
attributes, audit committees, and ownership structure in shaping risk management
practices within the Sri Lankan corporate landscape
