THE ROLE OF OWNERSHIP STRUCTURES IN DRIVING CSR TRANSPARENCY: INSIGHTS FROM FRONTIER MARKET INSURANCE COMPANIES
Gowsalya, S. 1 and Ekanayake, R.G.I.D. 2*
1,2Department of Finance and Accountancy, Faculty of Business Studies,
University of Vavuniya, Sri Lanka
1sinnayagowsi@gmail.com, 2 sachiniekanayake44@gmail.com
ORCID ID: 0009-0007-4344-9595
ABSTRACT
This study investigates the relationship between Corporate Social Responsibility (CSR) disclosure and ownership structure in listed insurance companies on the Colombo Stock Exchange. Focusing on 25 high-performance firms from 2019 to 2023, the research examines how institutional, foreign, and managerial ownership influence CSR practices. Regression analysis is employed to assess these relationships. The findings reveal that both institutional and foreign ownership have a significant positive effect on CSR disclosure. Specifically, institutional investors, driven by a focus on long-term performance and sustainability, and foreign investors, motivated by global standards and regulatory compliance, push for more transparent and robust CSR practices. These ownership types are linked to greater CSR disclosure, measured through enhanced reporting on social and environmental issues, improved stakeholder communication, and adherence to international CSR frameworks. In contrast, managerial ownership shows a negligible impact on CSR disclosure, suggesting that managers may prioritize financial performance or other internal goals over CSR objectives. This study makes a unique contribution to the literature by demonstrating how different ownership structures directly influence CSR practices in emerging markets, such as Sri Lanka’s insurance sector. It highlights that institutional and foreign ownership can drive improvements in corporate transparency, while managerial ownership may not be a significant catalyst for CSR engagement. The implications of these findings are particularly relevant for stakeholders, including policymakers, corporate managers, and investors. Policymakers should consider encouraging institutional and foreign ownership to foster stronger CSR practices. For corporate managers, aligning ownership structures with CSR goals can enhance both corporate reputation and long-term financial success. Investors, particularly institutional and foreign, can leverage their influence to ensure that companies prioritize CSR in line with global expectations. This research provides critical insights into the role of ownership in shaping CSR disclosure in emerging markets, contributing to the broader discourse on corporate governance and accountability.
Keywords: Ownership Structure Typology, Sri Lankan Insurance Sector, CSR reporting Standards
