Impact of Board Characteristics and Audit Quality on Financial Performance in Sri Lankan Listed Commercial Banks

The study mainly focuses on how better corporate governance affects financial performance and how corporate governance practices affect Sri Lanka’s licensed commercial banks. By the board size, Board Independence, CEO Duality, Gender Diversity, Board Composition, and Audit quality, the study defines corporate governance and financial performance considers the dependent variables. This study’s objective is to analyze the levels and direct connection between corporate governance and factors and the financial performance of Sri Lankan commercial banks. In order to allow the banking industry in Sri Lanka to establish a strategy for improving corporate governance, the study identifies various factors that are of major importance as regards bank management. This will help the Banks to improve their competitive position in the banking sector and ensure that they can survive, particularly during an era of extreme competition. This study focuses on the sample of 11 banks out of 24 licensed commercial banks and the study collects data over the period from 2018 to 2022. The panel regression analysis was used to analyze the relationship between the variables. The results suggest that the Board size has a significant negative impact to ROE and positively significantly affects to ROA and Board Independence positively and significantly affects ROE.