Abstract:
This study investigated the relationship between board structure and financial performance of
listed finance companies in Sri Lanka. Data were gathered from the financial statements of
randomly selected 20 finance companies which are listed on CSE under Bank, Finance and
Insurance Sector for the period of 2011-2015. Financial performance was measured by return
on assets (ROA). Board size, female board members, CEO duality, and non-executive
directors were considered as the parameters of board structure. Furthermore market
capitalization was taken as the control variable. Pooled OLS was performed using STATA
for the analysis of data. Results of the study revealed that board size and non-executive
directors had significant relationship with ROA. Besides, female board and CEO duality were
not significantly related to ROA. This study may helpful for the practitioners and policy
makers to maximize the profit. Moreover, analyzing the relationship between board structure
and financial performance of firms offering non-financial services can also be a worthwhile
research.
