Corporate Governance Matters: Analysing Its Effect on Sustainability Reporting

This study investigates the impact of corporate governance factors on sustainability reporting in Sri Lanka. A sample of 40 listed companies was drawn from the Colombo Stock Exchange using a stratified random sampling method, and data were collected from the period of 2013- 2023. The proposed hypotheses were tested using the panel regression analysis. The findings indicate that board independence, dual leadership, and board diversity are significantly associated with sustainability reporting practices, and board size has no significant impact on sustainability reporting practices. This study focuses on the development of sustainability reporting by public listed companies in a developing country context and the firm-specific characteristics that influence their sustainability reporting. The findings of this study focus on the management implications of board involvement, which is important to policymakers in the emerging capital markets. The outcomes of this study advise enterprises to intentionally seek to design an effective corporate governance mechanism that would inspire and persuade leaders to commit to initiatives related to sustainability and modify their disclosure procedures accordingly.