Corporate Governance and Corporate Social Responsibility Disclosure: A Study of Selected Listed Companies in Sri Lanka

The primary objective of this study is to investigate the link between corporate governance and corporate social responsibility disclosure in Sri Lankan listed firms. Corporate governance was evaluated using the following criteria: board size, board independence, role duality, women representation, audit committee size, and ownership concentration. The GRI methodology was utilized to assess CSR disclosure using content analysis. This study collects balanced panel data from 44 Sri Lankan listed firms over a five-year period, from 2018 to 2022. Because of their highly regulated nature, the banking, finance, insurance, and investment trust industries were omitted from the sample. All of the information was gathered from yearly reports published on the Colombo Stock Exchange's website in Sri Lanka. Descriptive statistics were used to characterize the data, and Pooled OLS regression analysis was utilized to study the association between corporate governance and corporate social responsibility disclosure. Regression results suggest that board size, board independence and women representation, have no significant relationship with CSRD. Role Duality, Audit Committee Size and Ownership Concentration exhibit a significant association with CSRD. Moreover, the mean value of the CSRD is 44.56 percent for the selected listed companies in Sri Lanka. This study only uses the GRI-based CSR disclosures published by the companies in their annual reports. However, many companies still need to publish GRI-based CSR disclosures in their annual report as it is evident through the mean CSRD value. However, those companies may use other disclosure formats in their annual reports which have not been portrayed in the study since the study has utilized GRI content elements as base. Therefore, the results cannot be generalizable. This study contributes to determining how effectively organizations have adhered to the GRI as a widely acknowledged disclosure framework. It is believed to offer value to the company's management in order for them to make better judgments on whether the firms should involve them in more corporate governance disclosures in order to raise the degree of CSR to enhance transparency and to promote stakeholders' well-being. The outcome also has ramifications for regulatory agencies in developing obligatory reporting requirements for all listed firms to comply with the GRI framework.