Index1.1 Chapter Introduction1.2 Background of the Study1.3 Problem Statement1.4 Research Questions1.5 Research Objectives1.6 Significance of the Study1. 7 Limitation of the Study1.8 Chapter Summary1.1 Chapter IntroductionThe objective of this chapter is to present the context of the study and provide justification for the study. Therefore, firstly the context of the study will be presented and secondly the research problem and research objectives will be discussed. Finally, the significance and limitations of the study were discussed. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay 1.2 Background of the Study Today every business operates in the huge competitive market while facing a new set of challenges. In the past, the company did not pay much attention to social responsibility, but was very concerned about profitability. Today that has changed. Companies must maximize profit while complying with corporate social responsibility (CSR). Companies that care about their financial performance should also care about maintaining a high level of corporate social performance (Mahoney and Roberts, 2007). The ethical guidelines of the United Nations Global Compact indicate that CSR issues will continue to gain importance. CSR is a company's obligation to maximize its positive impacts and minimize its negative impacts on society. But different authors have defined CSR differently as follows. Williams and Siegel (2011), described CSR as "actions that appear to promote a social good, beyond the interests of the company and what is required by law". Corporate social responsibility is a business system that allows the production and distribution of wealth for the betterment of its stakeholders through the implementation and integration of ethical systems and sustainable management practices. Corporate Social Responsibility (CSR) refers to strategies that companies or businesses conduct their business in a manner that is ethical, respectful of society and beneficial to the community in terms of development. Today, CSR has a growing trend not only in business and academia, but also in everyday life. There are many highlighted factors that lead to CSR concern, such as inappropriate corporate behavior towards the customer, unfair treatment of employees, ignorance of the environment and consequences of organizational actions. Stock exchanges and other financial institutions around the world are convincing for listed companies to provide information on their CSR activities. For example, in South Africa all companies listed on the Johannesburg Stock Exchange must comply with a code of conduct based on CSR. In many countries CSR is not a mandate but a voluntary activity. Companies not only care about CSR activity but also try to report their CSR activities for many reasons. According to Manamperi and Rajapaksha (2012), such reasons are: informing stakeholders, providing a more complete picture of the company, meeting best practices in corporate reporting, deriving positive public relations benefits from CSR, meeting the requirements of major shareholder disclosure, to ensure that employees are aligned with the company's objectives, to demonstrate an open management style, to reflect the company's emphasis on CSR, to demonstrate to stakeholders that even non-issues finances are important. Today, Corporate Social Responsibility Disclosure (CSRD) is of increasing concern compared to before. Therefore, the CSRDsbecome an important research topic in business studies. To survive and thrive, the company should identify the gap between the expectations of key stakeholders and what the company offers to stakeholders. Enterprises must adopt the system that bridges the gap between economic performance and social system. Stakeholders are individuals and groups who have an innate interest in the organization's activities and who directly and indirectly influence or are influenced by the organization's goals and strategies. Business should address both primary and secondary stakeholder expectations. Primary stakeholders are those who directly engage in transactions with the company and are essential to the company's existence, survival, and perpetual growth. Secondary stakeholders are those who do not engage in transactions with the company and are not very essential to the existence, survival and perpetual growth of the enterprise. Stakeholders, who have a high level of corporate interest and a high level of power, are the key stakeholders. Stakeholder power is the extent to which individuals or groups are able to influence, induce or compel others to follow certain courses of action in their favor. Investors are one of the main stakeholders. Within a company, identify the two types of investors. One is individual investors, the other is institutional investors. Not only individual investors but also institutional investors are important for the organization because they bring liquidity to the organization. Institutional investors are organizations that raise large sums of money and invest those sums in securities, real estate, and other investment assets. Institutional investors can have some influence on management companies because they will have the right to exercise the voting rights of the company. Institutional investors are important to a company because they have large amounts of money for immediate investment and have a lot of power. Institutional investors can react to the activity, based on corporate CSRD activities. Therefore, this study seeks to examine the impact of Corporate Social Responsibility Disclosure on IO in the Sri Lankan context. 1.3 Problem Statement Different authors have found different results when testing the relationship between Corporate Social Responsibility Disclosure (CSRD) and Institutional Ownership (IOWN). Saleh et al, (2010) (Teoh and Shiu, 1990). Teoh and Shiu (1990), observe institutional owners' attitudes towards CSR and sources of information on activities. They learn that investors usually do not change their investment decisions based on the company's CSR statement. In the Sri Lankan context, there are some journal articles related to CSR practices and the impact of CSR on corporate financial performance (CFP). According to Madurasinghe and Jahfer (2016), corporate social responsibility has a positive relationship with the financial performance measurement of return on equity in the Sri Lankan banking sector. Research by Abeysinghe and Basnayake (2015) reveals that there is a negative relationship between CSR disclosure and financial performance of selected domestic commercial banks. The researcher identified that FP will not be totally dependent on CSR disclosure. But I found a lack of newspaper articles related to CSRD and institutional ownership. Therefore, the question that requires attention is “Is the impact of CSRD dose on IOWN in companies listed on the CSE?” This is what this study seeks to examine.1.4 Research Questions There is a significant impact of CSRD.