Institutional investors are placing increasing emphasis on board quality, director independence and effective governance when assessing investment opportunities, according to LYNEAR Wealth Management Co-Founder and Managing Director Dr. Naveen Gunawardane.
Speaking at the Sri Lanka Corporate Director Summit 2026 under the theme Future Ready Sri Lankan Directors, Dr. Gunawardane urged corporate leaders to reflect on whether directors serving on multiple boards can dedicate sufficient time and attention to each organisation. He cautioned that excessive board appointments could undermine effectiveness and weaken investor confidence.
Addressing an audience of corporate directors and business leaders, Dr. Gunawardane noted that institutional investors carefully evaluate the calibre of boards before considering company valuations. He stressed that governance standards, board expertise and accountability to shareholders have become decisive factors in attracting long term investment.
He also questioned whether independent directors are genuinely independent or merely appointed through personal relationships, emphasising that minority shareholder protection remains a key priority for professional investors. According to him, independent directors must be prepared to challenge management decisions, scrutinise related party transactions and safeguard the interests of all shareholders.
Dr. Gunawardane further observed that while board diversity is important, companies should avoid treating it as a compliance exercise. Instead, boards should prioritise members with relevant industry expertise, sufficient time commitment and the ability to exercise independent judgement.
He concluded that listed companies and private firms seeking investment should continuously review their governance structures to ensure they meet the expectations of institutional investors. Strong, accountable and knowledgeable boards, he said, will play a critical role in enhancing corporate performance while improving Sri Lanka’s appeal to both local and international investors.
