Abstract:
The stability of the banking sector is of utmost importance for the economic and financial
development of a country. However, the stability of the banking sector become an issue
due to sudden failures of banking institutions. With that, corporate governance has been
identified as a mechanism which can be used to prevent such failures since it has the ability
to improve the governance structure and thereby the soundness and healthiness of banks.
Therefore, corporate governance has been introduced and promoted among banks all over
the world during the last few decades. Accordingly, this study investigates the impact of
introducing corporate governance principles on PDBs of Sri Lanka during the period from
2004 to 2015.
This study focuses on four objectives, and mixed methods of research are employed to
achieve these objectives. In relation to the first and second objectives, quantitative research
method is employed. i.e. 1). to examine the level of compliance on corporate governance
by PDBs of Sri Lanka; and 2). to investigate the impact of individual corporate governance
mechanisms and the level of compliance on the performance of PDBs of Sri Lanka. CGCI
was constructed by the researcher to measure the level of compliance. Panel data regression
analysis was employed to examine the impact of corporate governance on the performance
of PDBs of Sri Lanka and data was collected from the annual reports of the individual
banks. ...
