title: Corporate governance and financial performance of Sri Lankan listed companies 2006-2010

authors: Hewa Wellalage, Nirosha

subjects: corporate governance

abstract: This thesis investigates the effect of corporate governance practices have on the financial performance and agency costs of multinational subsidiaries and local public companies in Sri Lanka. In particular, this study examines (i) the relationship between corporate governance mechanisms of Sri Lankan listed companies, financial performance, principal-agent and principal-principal agency costs  (ii) corporate governance practices and compliance differences of multinational company subsidiaries (MNCs) and local public companies (LPCs) in Sri Lanka, (iii) whether voluntary compliance with the new corporate code had an effect on firm financial performance and agency costs and (iv) corporate governance and firm financial performance differences across quantiles of performance proxies in MNCs and LPCs.
Corporate governance has become a major issue since the collapse of major companies around the world.  Additionally, the Asian financial crisis in 1997 showed the need for legislative reforms to strengthen corporate governance practices in that region. Now, it is widely believed that good corporate governance is an important factor in improving firm financial performance in both developed and developing financial markets.   Until the mid-1990s, corporate governance was popularly known in Sri Lanka as, the systems used to control and direct companies.  A real effort to codify the principle of corporate governance in a structured manner in Sri Lanka was made in 1996.  Since the financial year commencing April 2008, Sri Lankan listed firms have been subject to mandated rules on corporate governance by the Securities and Exchange Commission of Sri Lanka.  The main purpose of this new mandatory corporate governance rule is promoting accountability, transparency and overall efficiency in corporate governance best practice.
This thesis makes a number of contributions to corporate governance and firm financial performance knowledge in several ways.  First, it provides evidence of the relationship between corporate governance practices and firm financial performance and agency costs.  Second, in contrast to most existing studies that use data from developed countries, this research considers how differences in institutional and governance systems between countries may impact firm financial performance, agency costs and corporate governance relationships. Third, this research is the first direct study of firm financial performance, agency costs and corporate governance practices for listed Sri Lankan companies. 
Data needed to test various hypotheses are sourced from the Handbook of Listed Companies - 2007, Fact Book - 2008 and Data library CD issued by the Colombo Stock Exchange  (CSE).  Further data have been collected from companies listed on the (CSE) during 2006-2010 that published audited annual reports. For the LPCs and MNC subsidiary companies, the sampling period is 2006 through 2010.   The focus of this thesis is on the governance variables that have been highlighted by the Sri Lankan Corporate governance best practice code (2008) and also other governance variables that are supported in the literature as providing an appropriate structure for the institutions in the environment in which they operate. 
Statistical issues such as controlling the endogenity effect and reverse causality effect of corporate governance variables indicate is appropriate to employ dynamic panel generalised method of moment estimators to explore the relationship between corporate governance variables, financial performance and agency costs.   Various other statistical techniques including as ANOVA test, panel tobit regression, difference-in-difference method, quantile regression are used to check hypotheses relevant in this study. 
The findings indicate that there is positive relationship between corporate governance and firm financial performance and a negative relationship between corporate governance and firm agency costs.  However, the process by which the firm financial performance and agency costs affect MNC subsidiaries and LPCs is different.  These results also support the central argument in corporate governance that the institutional and cultural differences determine the effect of complying corporate governance and financial performance and agency costs.   
Although Sri Lanka basically follows an Anglo-American model of corporate governance, country institutional and cultural differences create a unique corporate governance environment in Sri Lanka.  It is important to further develop the corporate governance code incorporating country specific characteristics rather than inherit bundles of corporate governance mechanisms from other developed countries. However, as this study shows, some mandatory corporate governance mechanisms have negative impacts on firm financial performance and/or increase company agency conflicts. A corporate governance framework appropriate for each organisation structure as “one size does not fit all” seems preferable.   Guidelines encompassing an “or explain” exemption clause may be particularly beneficial in emerging economies.

text: Corporate governance and financial performance of Sri Lankan listed companies 2006-2010 This thesis investigates the effect of corporate governance practices have on the financial performance and agency costs of multinational subsidiaries and local public companies in Sri Lanka. In particular, this study examines (i) the relationship between corporate governance mechanisms of Sri Lankan listed companies, financial performance, principal-agent and principal-principal agency costs  (ii) corporate governance practices and compliance differences of multinational company subsidiaries (MNCs) and local public companies (LPCs) in Sri Lanka, (iii) whether voluntary compliance with the new corporate code had an effect on firm financial performance and agency costs and (iv) corporate governance and firm financial performance differences across quantiles of performance proxies in MNCs and LPCs.
Corporate governance has become a major issue since the collapse of major companies around the world.  Additionally, the Asian financial crisis in 1997 showed the need for legislative reforms to strengthen corporate governance practices in that region. Now, it is widely believed that good corporate governance is an important factor in improving firm financial performance in both developed and developing financial markets.   Until the mid-1990s, corporate governance was popularly known in Sri Lanka as, the systems used to control and direct companies.  A real effort to codify the principle of corporate governance in a structured manner in Sri Lanka was made in 1996.  Since the financial year commencing April 2008, Sri Lankan listed firms have been subject to mandated rules on corporate governance by the Securities and Exchange Commission of Sri Lanka.  The main purpose of this new mandatory corporate governance rule is promoting accountability, transparency and overall efficiency in corporate governance best practice.
This thesis makes a number of contributions to corporate governance and firm financial performance knowledge in several ways.  First, it provides evidence of the relationship between corporate governance practices and firm financial performance and agency costs.  Second, in contrast to most existing studies that use data from developed countries, this research considers how differences in institutional and governance systems between countries may impact firm financial performance, agency costs and corporate governance relationships. Third, this research is the first direct study of firm financial performance, agency costs and corporate governance practices for listed Sri Lankan companies. 
Data needed to test various hypotheses are sourced from the Handbook of Listed Companies - 2007, Fact Book - 2008 and Data library CD issued by the Colombo Stock Exchange  (CSE).  Further data have been collected from companies listed on the (CSE) during 2006-2010 that published audited annual reports. For the LPCs and MNC subsidiary companies, the sampling period is 2006 through 2010.   The focus of this thesis is on the governance variables that have been highlighted by the Sri Lankan Corporate governance best practice code (2008) and also other governance variables that are supported in the literature as providing an appropriate structure for the institutions in the environment in which they operate. 
Statistical issues such as controlling the endogenity effect and reverse causality effect of corporate governance variables indicate is appropriate to employ dynamic panel generalised method of moment estimators to explore the relationship between corporate governance variables, financial performance and agency costs.   Various other statistical techniques including as ANOVA test, panel tobit regression, difference-in-difference method, quantile regression are used to check hypotheses relevant in this study. 
The findings indicate that there is positive relationship between corporate governance and firm financial performance and a negative relationship between corporate governance and firm agency costs.  However, the process by which the firm financial performance and agency costs affect MNC subsidiaries and LPCs is different.  These results also support the central argument in corporate governance that the institutional and cultural differences determine the effect of complying corporate governance and financial performance and agency costs.   
Although Sri Lanka basically follows an Anglo-American model of corporate governance, country institutional and cultural differences create a unique corporate governance environment in Sri Lanka.  It is important to further develop the corporate governance code incorporating country specific characteristics rather than inherit bundles of corporate governance mechanisms from other developed countries. However, as this study shows, some mandatory corporate governance mechanisms have negative impacts on firm financial performance and/or increase company agency conflicts. A corporate governance framework appropriate for each organisation structure as “one size does not fit all” seems preferable.   Guidelines encompassing an “or explain” exemption clause may be particularly beneficial in emerging economies.

year: 2012

title: Young law and management students' perception of their future career

authors: Dyer, Suzette L.

subjects: women law students

abstract: In this paper, we examine young women law and management students' perceptions of their future career. Using focus groups, women participants stated that the main barriers to their future career progression would be conflict between motherhood and pressure to work long hours and pay disparities. The participants were unaware, however, of the many persistent barriers that restrict women's career advancement. Moreover, the law students had constituted themselves as future working mothers, while the management students constituted women as unreliable workers because of potential motherhood. These perceptions suggest that these young women are already conditioned to assimilate into current gendered employment structures evident in these two professions and are ill prepared to challenge gendered practices that restrict women's career advancement.

text: Young law and management students' perception of their future career In this paper, we examine young women law and management students' perceptions of their future career. Using focus groups, women participants stated that the main barriers to their future career progression would be conflict between motherhood and pressure to work long hours and pay disparities. The participants were unaware, however, of the many persistent barriers that restrict women's career advancement. Moreover, the law students had constituted themselves as future working mothers, while the management students constituted women as unreliable workers because of potential motherhood. These perceptions suggest that these young women are already conditioned to assimilate into current gendered employment structures evident in these two professions and are ill prepared to challenge gendered practices that restrict women's career advancement.

year: 2008

title: Home and the spirit in the Maori world

authors: Nikora, Linda Waimarie

abstract: Today we explore home as a place of spiritual belonging and continuity and how tangi relies on the genealogical connectedness of ancestral and living communities to care for the tūpāpaku, the human remains, and wairua, the spirit of the deceased, as well as the living. While colonisation and westernisation have changed us, the institution of tangi, our rituals of death and mourning, have remained since pre-encounter times. In the face of death, tangi and its repetitive ritualised pattern of encounter and mourning might be viewed as a lifeline to hold on to as the disturbance and turmoil spawned by death is endured.

We begin this paper by returning to the beginning, the place of potentiality to contemplate our spiritual origins and life endowments. We consider the nature of Māori beliefs about a spiritual afterlife and how through the institution of tangi we guide and support the departing spirit on its way. We argue that these rituals of departure and support are most optimally performed within the context of our marae and spiritual landscapes. Reinforcing this, the interment of the deceased amongst kin enhances our togetherness, in life and death, and protects us from entities with malevolent intent. For these reasons, we reaffirm the rightness of our beliefs and practices. Contestation of tūpāpaku, an act of spiritual responsibility in which tūpāpaku are returned to their tribal homelands for mourning and interment amongst kin is presented as an exemplar of right spiritual practice. We conclude with a discussion of some challenges Māori must confront to live life more consciously in spiritually responsible ways and in continuity with our origins and futures.

text: Home and the spirit in the Maori world Today we explore home as a place of spiritual belonging and continuity and how tangi relies on the genealogical connectedness of ancestral and living communities to care for the tūpāpaku, the human remains, and wairua, the spirit of the deceased, as well as the living. While colonisation and westernisation have changed us, the institution of tangi, our rituals of death and mourning, have remained since pre-encounter times. In the face of death, tangi and its repetitive ritualised pattern of encounter and mourning might be viewed as a lifeline to hold on to as the disturbance and turmoil spawned by death is endured.

We begin this paper by returning to the beginning, the place of potentiality to contemplate our spiritual origins and life endowments. We consider the nature of Māori beliefs about a spiritual afterlife and how through the institution of tangi we guide and support the departing spirit on its way. We argue that these rituals of departure and support are most optimally performed within the context of our marae and spiritual landscapes. Reinforcing this, the interment of the deceased amongst kin enhances our togetherness, in life and death, and protects us from entities with malevolent intent. For these reasons, we reaffirm the rightness of our beliefs and practices. Contestation of tūpāpaku, an act of spiritual responsibility in which tūpāpaku are returned to their tribal homelands for mourning and interment amongst kin is presented as an exemplar of right spiritual practice. We conclude with a discussion of some challenges Māori must confront to live life more consciously in spiritually responsible ways and in continuity with our origins and futures.

year: 2013