Abstract:
Corporate governance is considered as the significant
implications for the growth of an economy. Good corporate
governance practices are important in reducing risk for
investors, attracting investment capital and improving the
performance of companies. Good corporate governance plays a
vital role in enhancing performance of companies. Board
structure and corporate report are used to measure the corporate
governance whereas returns on assets, return on equity and net
profit are used to measure the firm’s performance. The data of
ten manufacturing companies in Sri Lanka representing the
period of 2006 to 2010 were used for the study. The multiple
regression analysis was applied to test the impact of corporate
governance on firm performance. The results show that there is
an impact of corporate governance on ROE and ROA. However
the impact of corporate structure on ROE and ROA is higher
than the board structure while the impact of board structure on
net profit is higher than the corporate reporting. Further the
study found a positive relationship between the variables of
corporate governance and firm’s performance.
