Abstract:
Transparency is an important aspect of corporate governance since it decreases
information asymmetry and allows stakeholders to make more informed
decisions. On the other hand, increased disclosure may also bring about various
risks, such as leaking of confidential information to rival businesses. An
investigation into the relationship between corporate transparency and the firm
value of financial institutions that are listed on the Colombo Stock Exchange
(CSE) is the focus of this research. The research makes use of Tobin's Q as a
method for determining the worth of a company, and it employs financial,
governance, operational, and social transparency indices as independent
variables. A sample of 61 publicly listed financial companies between the years
2021 and 2023 were considered. The procedures utilized were panel data
regression. While the findings indicate that social transparency has a large and
favourable impact on Tobin's Q, the results also indicate that financial
transparency, governance transparency, and operational transparency do not
exhibit a statistically significant effect. This study contributes to the existing
body of literature on corporate governance by drawing attention to the role of
social transparency in the process of growing company value. Additionally, it
suggests implications for policymakers and corporate stakeholders.
