Bank corporate governance in Sri Lanka: A survey

Nishani Ekanayake, Karim Sorour, Stan Oliver

Research output: Contribution to conferencePaper


The main objective of this study is to investigate bank corporate governance practices in Sri Lankan banking sector using a grounded theory methodology. The study tries to understand corporate governance as a context-based phenomenon, through shared experiences and interpretations of social and cultural factors in the considered context. The findings will challenge the mainstream theories of corporate governance in light of its inability in identifying key elements which are fundamentally reside in the construction of corporate governance process which goes beyond economic and legal perspectives. A survey was utilized in this grounded theory study to improve the verification and accuracy of evidence in a more flexible manner to enable further theory generation. Therefore, this paper is based on a survey and pilot interviews which was conducted at the early stage of the research with an aim of generating contextual sensitivity for a wider phenomenon of corporate governance and to enlighten question formulation in subsequent semi-structured interviews. Three pilot interviews were conducted and survey questionnaire was collected from 25 participants. These participants represent 10 banking institutions, Central bank, international rating organisation, bank primary dealer and a media company. Survey results were analysed using frequency tables and the findings were enriched with the aid of pilot interviews. The study addressed corporate governance issues related to three broad categories namely: board structure and practices, internal controls and corporate culture. Findings revealed that the existing corporate governance practices in banking institutions to a greater extent are affected by the corporate culture and political patronage in the country. Main issues identified in the survey are: ineffective sanctions on non-compliance, lack of auditor’s expertise and independence, improper political influence on bank affairs, controlling shareholders influence, conflict of interest at the board level and less transparent procedure for the selection of directors. Further, it was revealed that corporate governance practices vastly differ between private and public banks. However, high compliance can be seen among banks for the mandated requirements of corporate government. The study brought different insights about the context, resulting in approaching different research participants which was informed by theoretical sampling and designing the subsequent interview guide with a narrowed research focus. Findings confirmed the feasibility of the main study and its usefulness in providing greater sensitivity to identify the context specific factors that influence the corporate governance practices of banking institutions in Sri Lanka.
Original languageEnglish
Number of pages16
Publication statusPublished - 27 Jun 2018
EventEmerging Scholars Colloquium of the 1st Accounting and Accountability in Emerging Economies (AAEE) Conference - University of Essex, Essex, United Kingdom
Duration: 27 Jun 201829 Jun 2018


ConferenceEmerging Scholars Colloquium of the 1st Accounting and Accountability in Emerging Economies (AAEE) Conference
Country/TerritoryUnited Kingdom


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