Towards Implementing Board Gender Diversity in Sri Lanka

Corporate governance is an increasingly topical theme. The voluminous literature on corporate governance is specifically affirmed by International Financial Institutions (IFIs) in reasoning out that good corporate governance practices can develop the economy by attracting investors and securing foreign direct investment. Accordingly, these IFIs have included corporate governance reform as a condition for funding to developing countries. Sri Lanka is an illustrative example of a developing country forced by IFIs to improve its corporate governance practices as a step towards advancing economic growth. The Sri Lankan legislators have been incorporating corporate governance rules of the United Kingdom (UK) to reform corporate governance practices within the country. Among these, board gender diversity is acknowledged as a legal strategy that is capable of providing economic and equality benefits. The economic benefits are based on the contribution women directors can make towards advancing board effectiveness. The equality benefits underpinning this strategy depict the manner in which gender equality could be promoted by board gender diversity rules. While the UK corporate governance rules have incorporated this strategy, the Sri Lankan legislators have not considered this approach. This study builds on this gap and explores through a socio-legal lens the feasibility of implementing board gender diversity rules in Sri Lanka. It demonstrates that board gender diversity rules could be a valuable tool for corporate governance development and to promote gender equality in society.