The Impact Of Board Meeting And Integrated Risk Management Committee Meeting Frequency On The Financial Performance Of Licensed Commercial Banks In Sri Lanka

Abstract

Corporate governance in the banking sector plays a critical role in ensuring accountability, transparency, and risk management key elements for financial stability and long-term success. This paper explores whether a higher frequency of board meetings, which ensures continuous oversight and strategic direction, and regular Integrated Risk Management Committee (IRMC) meetings, which address risk challenges, lead to improved financial performance. Accordingly, this study investigates the relationship between the frequency of board and IRMC meetings with the financial performance of licensed commercial banks in Sri Lanka. It uses key financial metrics such as Return on Assets (ROA) and Return on Equity (ROE) as indicators of performance. By analyzing data from a sample of licensed commercial banks over five years, the research examines how governance practices influence these metrics. The study applies quantitative methods, utilizing regression analysis to assess the correlation between meeting frequency and financial outcomes, while controlling for variables such as bank size and age. The results offer insight into the optimal frequency of governance meetings necessary to foster stronger financial results and more effective risk management in the banking sector. The findings also have significant implications for regulatory bodies, bank boards, and shareholders, suggesting that regular board and IRMC meetings are crucial for ensuring governance practices that enhance performance and mitigate risks. This study contributes to the ongoing discourse on the importance of governance structures in emerging markets, particularly within Sri Lanka’s banking industry, and offers practical recommendations for improving oversight and risk management in licensed commercial banks.