Abstract:
This research seeks to reduce a gap in the extant literature on the relationship
between board composition and firm performance in Sri Lanka as an example of emerging markets. The board composition is a key internal control mechanism directed at aligning the interests of shareholders and managers and/or disciplining/ removing ineffective management, it is important to understand how board composition impacts on firm performance in an emerging market. This study uses quantitative techniques to assess the board composition and firm performance of Sri Lankan firms. A 150-firm sample, from the Colombo stock exchange (CSE)-listed firms. The secondary data for independent variables are collected for 2016, providing for a one-year lag to the 2017 performance data. The findings indicate a significant positive role of the board size and board independence in the performance measures (i.e., ROA and ROE), while female participant, board meetings and CEO duality are not significantly associated with any of the firm performance measures. The results extend academic research attempting to enhance understanding of the role of board composition in the different aspects of firm performance.
