Kelaniya Journal of Management

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Start date: 2020Subject: search.filters.subject.Corporate Governance

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    Corporate Governance Practices and Their Impacts on Corporate Risk: Evidence from Sri Lanka.
    (Faculty of Commerce and Management Studies, University of Kelaniya., 2020) Sameera T.K.G.
    The cost of failure of a single corporate has a fatal impact on the economy. In addition to the macro-economic conditions leading to corporate collapse, management is responsible for developing and implementing a sound system of risk management and internal control in order to avoid such collapses. As a result, discussions on governance and risk have reached an unprecedented level for academics and practitioners. Moreover, risk exposure and management are increasingly becoming the foremost functions of modern business enterprises. However research that integrates corporate governance and risk has been limited. This study examines therefore the impact of corporate governance practices on corporate risk of listed companies in the Colombo Stock Exchange in Sri Lanka. The Board structure, Board Independence and Board procedures were considered as independent variables, whereas, corporate risk as dependent variable. The corporate risk represented the financial, operational and market risks faced by the companies. Furthermore the study used data from a sample of 64 listed companies for 5 years from 2014 to 2018 and employ panel regression to uncover the relationship that exists between these variables. The independent sample t-tests was used to test whether there was a statistically significant difference exist between the corporate governance practices of distress and non-distress companies. The results show that the corporate governance practices of distress companies was significantly lower than that of non-distress companies. The findings of the regression results suggest that Board independence was significantly and negatively impact on corporate risk. However, Board structure and Board procedures have no significant impact on corporate risk. The study therefore, concludes that the increased representation of independent non-executive directors of the board contributed to the significant decrease of corporate risk.
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    Determinants of Board Size and Its Composition: Evidence from Nigerian Manufacturing Sector
    (Faculty of Commerce and Management Studies, University of Kelaniya., 2020) Mustapha Y. I.; Nafiu A. I.; Abdul F. A.; Omolekan, O. J.
    This paper examines the determinants of corporate board size and its composition in Nigeria using listed manufacturing firms as study area. The objective of the paper is to determine the effect of firms’ characteristic on board size. The study collected secondary information from thirty listed manufacturing firms that met the requirement for selection as sample between 2006 and 2018 through Nigerian Stock Exchange’s Fact Books. Multiple regression analysis was used as analytical technique. Using panel data OLS pooled method of estimation, the paper found that firm size, profitability, and growth opportunities are strong determinants of board size. Similarly, the results indicated that CEO-duality and profitability were determinants of board composition in the study. It is recommended that appointment into corporate board should be based on proven demonstration of high level of expertise, merit and due consideration to firms’ characteristics instead of mundane factors that would not enhance shareholders’ wealth.