Abstract:
This study designed to investigate the association between selected board
characteristics and firm performances of organisations registered under the
manufacturing sector of the Colombo Stock Exchange. Accordingly, 28 companies
have been used as sample over four years (2014 -2017) with the main objectives to
measure the level of corporate governance and board characteristics of selected
companies and to examine their association. ROA and ROE used as the dependent
variables of the study and board size, board independence, board meetings, board
diversity, CEO duality and existence of nomination committee as board
characteristics used as independent variables while controlling for three variables
(i.e., firm size, age and leverage). Results obtained via correlation analysis, OLS
regression and panel regression showcase that only board diversity and existence of
nomination committee possess the significant impact on firm performances.
Leverage is the only control variable which become negatively significant in
explaining the variation of firm performances. The study suggests vital managerial
implications to policy makers in reforming and strengthening corporate governance
guidelines to achieve higher firm performance.
