Published Online:October 2024
Product Name:The IUP Journal of Corporate Governance
Product Type:Article
Product Code:IJCG021024
Author Name:Wickramanayake RUE, Dissanayake DHSW and Deshika NPT
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:34-50
The study examines the impact of board diversity on corporate sustainability reporting in Sri Lankan companies listed on Colombo Stock Exchange (CSE) based on Stakeholder Theory and Signaling Theory. The data was gathered from audited annual financial statements and other significant disclosures of 50 companies from banking and financial sectors during 2016 to 2019. The data was analyzed using descriptive statistics, correlation, and regression. Under board diversity, the study used board independence, foreign directorship, gender diversity, academic qualifications, and professional qualifications to measure the influence on corporate sustainability reporting. The study measured sustainability reporting under three sections: environment, economic and social sustainability reporting. Sustainability reporting was measured based on compliance with the global reporting initiative (GRI) guidelines. According to the findings, professional qualifications of board members is positively and significantly associated with corporate sustainability reporting, whereas gender diversity and foreign directorship are positively and significantly associated with environmental sustainability. The results show that board diversity can indeed improve corporate sustainability reporting, which has significant meaning for investors, company management, decision-makers, and industry regulators.
The economic impacts of the Covid-19 pandemic highlighted the importance of corporate sustainability. According to the World Bank (2020), due to lockdowns, more than half of the micro, small, and medium enterprises (MSMEs) in the developing world faced sustainability issues. As a result, corporate sustainability is a major concern in today’s world.