Corporate Governance Factors Influence to the Voluntary Disclosures in Banking and Finance Companies in Sri Lanka

The purpose of this research is to examine the relationship between corporate governance variables and voluntary disclosure level in banking and finance companies which are registered in the Colombo Stock Exchange (CSE) in Sri Lanka. To measure voluntary disclosure level of aforesaid companies used content analysis of annual reports for the period between 2012 and 2015. This study has developed a voluntary disclosure index which includes 83 items under 9 sub categories with the intention of measuring level of voluntary disclosures. Panel data analysis used to measure the relationships and this study used size of the board, proportion of independent directors, and board with female directors, a large audit firm as independent variables. Size of the firm, profitability, age and leverage are used as control variables. Empirical results of study indicates that independent directors and female directors on the board have significant positive relationships with voluntary disclosures whereas the board size has an insignificant positive relationship with voluntary disclosures and there is a significant negative relationship between voluntary disclosures and corporate governance.