Abstract:
Today almost all business firms confront with an important issue that is conflict of interest between shareholders and
management of the company. Corporate governance is a key mechanism that articulated to protect the interests of
shareholders and all other stakeholders. As a part of corporate governance, the ownership structure performs a significant
role in minimizing the cost related with the separation of ownership and control of the company. Different ownership
structures take different dimensions and it affects to determine the directions of an entity. According to the ownership
structure entities have to face various risks as well as challenges. Many researchers found that the way of accepting and
managing risk is different according to the various structure of ownership. Country’s social, economic, political and
regulatory environment affects to determine the shape of ownership structure of an entity. So it should necessarily be
investigated whether the ownership structure affects towards the risk management of the listed companies in Sri Lanka.
This research focuses to investigate the effect of ownership structure on risk management while filling the contextual
research gap. For this study, all companies listed in Colombo Stock Exchange (CSE) are considered as the population.
Stratified sampling method was employed and 30 companies were selected. The analyzing time period was 2012 to 2017.
Data was collected from annual reports of selected companies. Institutional Ownership, Family Ownership and Ownership
Concentration are considered as independent variables. As the control variables Firm Size and Financial Leverage are taken
into account in this study. Risk management is considered as the dependent variable.Risk management was measured by
using beta value. Regression analysis was employed to analyze the data. The findings of this study revealed that ownership
structure significantly affects on risk management. The results of this study will help entities to articulate and form their
ownership structure so as to mitigate and manage the risk of that entity.
