Corporate Reporting Practices of Commercial Banks in Sri Lanka

Effective corporate disclosure practices are essential in achieving and maintaining public trust and confidence in the banking system, and these practices are critical to the proper functioning of the banking sector in particular and the economy in general. However, little attention has been given to the corporate governance of the banking sector especially in developing economies. The study examines corporate governance practices of commercial banks by measuring the level of corporate disclosures in the annual reports in relation to the corporate governance guidelines for Banks. This study used a descriptive research design based on secondary data obtained from published statements of accounts of commercial banks in Sri Lanka. The sample covers the annual reports of five listed and two public commercial banks whose annual reports were available for the eight-year period from 2011 to 2018. An “Index of Disclosure” consisting of items of information that should appear in an annual report, was constructed. By examining the annual reports of 2011 to 2018, the findings show a gradual increase in the level of disclosure and its categories over the observed period. The results also reveal that firm characteristics; turnover and profitability have a significant positive association with disclosure score, except assets in place.