Abstract:
The significance of sustainability has increased due to the COVID-19, and there is a
dearth of studies on the impact of board remuneration on corporate sustainability
(CS). As a result, this study examines the level of CS in Sri Lanka and the impact of
board remuneration on CS. This research is based on a sample of 88 listed firms in
the Colombo Stock Exchange (CSE) from 2016 to 2019. The Global Reporting
Initiative (GRI) standards 2020 were used to generate the Sustainability Index to
measure the level of sustainability, and board remuneration is measured using
directors’ remuneration, remuneration committee’ size, meetings, independence,
and disclosure. After conducting the Hausman test, the descriptive statistics and
panel regression analysis were used to achieve the main objectives. The study found
that the average level of the Sustainability Index is 47.02% and directors’
remuneration has a significant positive impact on economic, environmental, social,
and total sustainability. In contrast, remuneration committee size has a significant
negative relationship between environmental and total sustainability. This study
looked at the impact of the board remuneration on corporate sustainability for all
companies that adopted GRI standards and contributed new knowledge to agency
and stakeholder theory concerning the study's goal. This study will help
professionals and academics better understand board remuneration-related
variables and their impact on corporate sustainability in Sri Lankan listed
companies.
