2. LITERATURE REVIEW In this literature review section inspect the works done by previous researchers in relation to the effect of panel characteristics on monetary performance. There are number of studies have been inspected relating to this topic on other countries. Though the number of research projects in Sri Lanka is low. 2.1. Theoretical LiteratureThe panel of directors is an important part of a corporation. A panel of directors is appointed to oversee the activities of a firm (Nazar, 2014). The directors have duties and responsibilities.Work at firm’s greatest interest, defensive the interests of shareholders, Participate in panel meetings and participate in decisions, Avoid battle situations, do not seek personal welfares, Keep privacy, fiduciary duty and vital discharge fee in specific committees of the panel are main duties of directors. In addition for directors to act according to the strict conditions of their order, Forcing them to use their care and skills in fulfilling their various tasks, Forcing them to use their discretionary powers in good faith and proper purpose and finally, to force them to act loyally in pursuing their company’s interests are key responsibilities of the panel of directors (Kanchan Damithendra).The Panel is a key component in the Corporate Governance System, which monitors administration in direction of relief and provides management directions to defend and increase stakeholder’s prosperity (Fama & Jensen, 1983). Corporate governance has been a vital subject of theoretical study and discovery of strategy in states around the world (Nazar, 2014). The object of corporate governance is to increase business’s accountability and avoid large scale tragedies before avoiding it. Unsuccessful enormous Enron, and its bankrupt employees and shareholders, is a key argument for the importance of compact corporate governance. The well-executed corporate governance should be comparable to the internal case unit of any police department, in which it should be overcome and overcome problems with excessive bias (Sun). (Ghabayen , 2012) Point out that the concept of Corporate Governance has been given a lot of attention in current studies throughout the world, especially due to the failure of some major companies such as some corporate scandals and commerce banks (1991) Enron (2001), Adelphia (2002) and World Com (2002). In addition it tells due to lack of experience in the implementation of corporate governance, Saudi Arabia’s corporate governance has some weaknesses. Good corporate governance practices are considered vital for investors to reduce risk, attract investment capital and increase corporate performance (Heenetigala , 2011).