Abstract:
The Purpose of this study is to examine the association between corporate
governance levels of the board and voluntary disclosure level of Sri Lankan
companies. Quantitative approach was used in positivist paradigm as the
research approach. Sample of 106 quoted companies (Representing Beverage
Food & Tobacco, Diversified, Hotels Travels, & Manufacturing sectors) for
the analysis is based on the list of quoted companies in Colombo Stock
Exchange (CSE) in Sri Lankan and the sample data has been collected from
published annual reports related to 2015/16 accounting period of 106
companies selected. There is a significant relationship between the board
governance level and voluntary disclosures in Sri Lankan companies. Thus,
higher board governance tends to disclose more disclosures regarding
corporate and strategic, financial and capital market, forward looking and
corporate social responsibility disclosures. The use of a board governance
index to arrive at a general board governance score can possibly cover major
underlying relationships of individual board governance attributes. The use of
disclosure index which is based on most recent literature with amendments
may also omit certain new information items that are disclosed in annual
reports. In addition, the distinctive classes of disclosures are solely adapted
from foreign studies with amendments. The findings of the research will help
policy makers and practitioners in formulating corporate governance policies.
However, this research is limited because it focuses on only companies listed
on the CSE. The results may therefore not be representative of all companies
operating in Sri Lanka. This study produces confirmation of the changing
scene of management voluntary disclosure practices embedded in the
corporate governance framework in a developing nation with a rising capital
market.
