IMPACT OF CORPORATE GOVERNANCE ON INTELLECTUAL CAPITAL EFFCIENCY – EVIDENCE FROM SRI LANKAN BANKING SECTOR
I.K.H.N Weerasinghe1 and K. K Thilakasiri2
1,2 Department of Accountancy, Faculty of Commence and Management, University of Kelaniya, Sri Lanka
hashininisansala257@gmail.com1, ktilakasiri@kln.ac.lk2
ABSTRACT
DOI : 10.57075/jaf1112402
The study explores the intricate link between Corporate Governance (CG) factors and Intellectual Capital (IC) efficiency within the Sri Lankan banking sector. It delves into the impact of variables such as Board Size (BSIZE), Board Activity (BACT), Board Independence Composition (BIND), Audit Committee Size (AUDS), and Frequency of Audit Committee Meeting (AUDM) on Intellectual Capital, treating the latter as the dependent variable. For the five years between 2018 and 2022, the research technique comprises a thorough investigation of banking sector company in Sri Lanka, excluding three banks. The goal of the study is to obtain understanding of the connection between CG variables and IC efficiency through secondary data analysis using data from stock market transactions and audited financial statements.
The main analytical tools are descriptive statistics and regression modeling, which enable a detailed comprehension of the relationship between CG dynamics and IC efficiency. Through a detailed examination of these variables across time and across different financial institutions, the study seeks to illuminate the ways in which CG practices impact the creation and application of IC in the banking industry. In the conclusion, the results of this study are important not only for scholars but also for professionals and decision-makers in the banking sector in Sri Lanka. The study provides significant insights that can guide strategic decision-making, governance reforms, and resource allocation within banking institutions, ultimately leading to improved organizational efficiency and long-term sustainability. This is achieved by revealing the complex relationships between Corporate Governance and Intellectual Capital.
Keywords-: Corporate Governance, Intellectual Capital, Value Added Intellectual Coefficient (VAIC)
