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: The Comprehension of Expository Science Texts Among Year 6 Students

authors: de Jonge, Sharyn Leanne

abstract: This study examined the influence of instruction in text feature knowledge and metacognitive strategies on the comprehension of expository text among Year 6 students. Over a period of 8 weeks, twelve Year 6 students read a series of 10 expository science texts with diagrams. An Intervention Group comprised of six students received instructional lessons that emphasised recognition of text features, integration of information across text features and identifying a navigational pathway. A Control Group, of a further six students, read the same material however, they did not receive instruction relating to metacognitive strategies and text features. Comprehension of each text was measured by multiple choice questions, pre and post knowledge assessment, and written response. Metacognitive awareness was measured pre and post intervention using a modified Metacognitive Strategy Index (MSI) (Schmitt, 1990). The study took a mixed methods approach. Qualitative data was analysed by thematic analysis. Quantitative data presents descriptive statistics that indicate differences between and within Intervention and Control Groups. Findings indicate that students benefit from explicit instruction in metacognitive strategies and text feature knowledge.

text: The Comprehension of Expository Science Texts Among Year 6 Students This study examined the influence of instruction in text feature knowledge and metacognitive strategies on the comprehension of expository text among Year 6 students. Over a period of 8 weeks, twelve Year 6 students read a series of 10 expository science texts with diagrams. An Intervention Group comprised of six students received instructional lessons that emphasised recognition of text features, integration of information across text features and identifying a navigational pathway. A Control Group, of a further six students, read the same material however, they did not receive instruction relating to metacognitive strategies and text features. Comprehension of each text was measured by multiple choice questions, pre and post knowledge assessment, and written response. Metacognitive awareness was measured pre and post intervention using a modified Metacognitive Strategy Index (MSI) (Schmitt, 1990). The study took a mixed methods approach. Qualitative data was analysed by thematic analysis. Quantitative data presents descriptive statistics that indicate differences between and within Intervention and Control Groups. Findings indicate that students benefit from explicit instruction in metacognitive strategies and text feature knowledge.

year: 2012

title: Strawmen and the decolonisation of the academy

authors: Tauri, Juan Marcellus

subjects: Social justice

abstract: For this piece I take as my point of departure Biko Agozino’s response to a series of questions posed by a member of the audience, to a panel he was a member of during this time in New Zealand. The panel in question was part of the launch of a new journal, Decolonisation of Criminology and Justice, at AUT University, Auckland in June 2018. Biko was invited to give a speech at the launch of the journal, and participate in a panel discussion on the broad theme of ‘decolonising criminology and criminal justice’.

text: Strawmen and the decolonisation of the academy For this piece I take as my point of departure Biko Agozino’s response to a series of questions posed by a member of the audience, to a panel he was a member of during this time in New Zealand. The panel in question was part of the launch of a new journal, Decolonisation of Criminology and Justice, at AUT University, Auckland in June 2018. Biko was invited to give a speech at the launch of the journal, and participate in a panel discussion on the broad theme of ‘decolonising criminology and criminal justice’.

year: 2019-07-10