Corporate Board and Firm Risk: An Emerging Market Perspective

Abstract

This study examines the relationship between board features and firm risk of listed companies in Colombo Stock Exchange for the period of 2010 to 2017. This research was carried out based on positivistic paradigm with the quantitative methodology. Secondary data were collected and analyzed using panel data analyze techniques to obtain quantitative measures of descriptive statistics, correlations, and regression analyses. The results show that the board features variables such as Board size, Women on board, Non-executive director, CEO Duality and Director Interlock have significant impact on firm risk. The results are consistent with agency theory perspective. On the other hand, Audit committee does not show any impact on firm risk in Sri Lankan companies. Our findings reveal that consistence is with theoretical expectation and code best practices. Further, it suggests that as far as the risk is concerned the existing corporate governance practices and code of best practices are effective in Sri Lankan context.