THE EFFECT OF CORPORATE BOARD FEATURES ON FIRM PERFORMANCE: SPECIAL REFERENCE TO MANUFACTURING SECTOR IN SRI LANKA

Abstract

Objective of the research remains to analyse the effect of board characteristics on firm performance of manufacturing sector in Colombo Stock Exchange, Sri Lanka. To analyse the impact of board characteristics, three factors were selected as independent variables for instance CEO duality, board size, non-executive capacity directors, and firm size is considered as a control variable. And the dependent variable of firm performance scaled by return on asset. Five years data of 33 companies out of 37 companies in manufacturing sector were selected as sample size of this study the from 2011 to 2016. Then the obtained data were analysed and presented with the aid of computer software SPSS 20.0 version. The study revealed that CEO duality, board size and non-executive director significantly negatively associated with ROA. Moreover control variable of firm size is significantly associated with ROA. Therefore, the researcher recommended some suggestions to improve the firm performance in line with corporate board characteristics.