Abstract:
The Sri Lanka experience, even though it has been a short one, has demonstrated that
business communities passed various stages towards adopting effective corporate
governance practices, the first and most important stage is raising awareness. Much
progress has been made in the regulatory environment in Sri Lanka during the last
years. The Central bank play Key role in enhancing corporate governance practices in
banking sector is the Central Bank of Sri Lanka. The Central Bank of Sri Lanka is
continuing its efforts to enhance corporate governance in the Sri Lanka banking
system. This research evaluated the effect of corporate governance on financial performance
of banking industries; special references with Licensed Commercial Banks in Sri
Lanka. Evaluation done by accordance with Corporate Governance practices
introduced by Institute of Chartered Accountants of Sri Lanka and Stock Exchange
Commission. Sample is selected as annual reports from 2008 to 2011 in order to view the corporate
governance practices and financial performance in selected LCBs. Furthermore, this
research only focuses on the secondary data. Researcher* used three types of data
analysis methods to analyze. Descriptive statistical analysis, Karl Pearson Correlation
and Analysis of Variance (ANOVA). These techniques are used to test the
hypotheses, solve research questions, and achieve goals and objectives of the study
The principles of good Corporate Governance are necessary, but not sufficient,
conditions for bank performance. As more experience is gained and feedback
received, suitable revisions will be made in future versions of this research.
Key Words : Corporate Governance, Financial Performance.
