Abstract:
The objective of this research is to examine the impact of corporate governance
mechanisms on firm performance of 13 banks in Sri Lankan banking industry over
the period of 2005-2014. This is an exploratory study which addresses the research
problem of does corporate governance affect the bank performance in Sri Lanka.
Return on Equity (ROE) is used as dependent variable and, Firm Size, Firm
Leverage, Audit committee composition, Board Independence, Board Size and CEO
Duality used as independent variables. This research has used only secondary data
and main source of data includes the annual report of the selected companies.
Empirical research was conducted based on the 130 observations and findings are
based on regression analysis. Researcher employed panel data methodology as a
method of estimation. Descriptive statistics, ANOVA and t-test applied on data by
using SPSS. Correlation techniques method has been used to test the hypotheses,
to solve the research problem, and to achieve goals and objectives of the study.
Accordingly, there is a significant impact of corporate governance on Performance of
the banking industry in Sri Lanka. Moreover, there is a positive relationship between
bank performance and board independence and firm size.
