Table of Contents1.1 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 Study Study 1.8 Summary of the Chapter 1.1 Introduction to the Chapter The objective of this chapter is to present the background of the study and provide the rationale for the study. Thus, on the one hand, the background of the study will be presented and, on the other hand, the research problem and the research objectives will be discussed. Finally, the importance and limitations of the study were discussed. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get Original Essay 1.2 Background of the Study Today, every business operates within a huge competitive market while facing new challenges. In the past, companies did not pay much attention to social responsibility, but they were very concerned about profitability. Today that has changed. Companies must maximize profits while respecting corporate social responsibility (CSR). Companies concerned with financial performance should also be concerned with maintaining a high level of corporate social performance (Mahoney and Roberts, 2007). The UN Global Compact ethical guidelines indicate that CSR issues will continue to increase in 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 some social good, beyond corporate interest and what is required by law.” business system that enables the production and distribution of wealth for the benefit of its stakeholders through the implementation and integration of ethical systems and sustainable management practices. Corporate Social Responsibility (CSR) refers to the strategies that companies or businesses carry out their activities in a way that is ethical, respectful of society and beneficial to the community in terms of development. Today, CSR is becoming more and more trendy not only in business and academia, but also in daily life. There are many highlighted factors that lead to the interest in CSR, such as poor business 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 compelling for listed companies. to provide information on their CSR activities. 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 is 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), these reasons are: to inform stakeholders, to provide a more complete picture of the company, to follow best practices in corporate reporting, to reap the positive benefits of CSR in public relations, meet majority shareholder disclosure requirements, to ensure that employees are aligned with the company's objectives, to demonstrate an open management style, to reflect the importance given to CSR by the company, to demonstrate tostakeholders that non-financial issues are also important. Today, there is growing concern about Corporate Social Responsibility Disclosures (CSRD). Therefore, CSRD becomes an important research topic in business studies. To survive and thrive, the company must identify the gap between the expectations of key stakeholders and what the company offers them. Businesses must adopt the system that bridges the gap between economic performance and the social system. Stakeholders are individuals and groups who have an innate interest in the activities of the business organization and who directly and indirectly influence or are affected by the organization's purpose and strategies. Business must address the expectations of both primary and secondary stakeholders. Primary stakeholders are those who directly engage in transactions with the business and are essential to the perpetual existence, survival and growth of the business. Secondary stakeholders do not engage in transactions with the company and are not very essential to the perpetual existence, survival and growth of the company. Stakeholders, who have a high level of interest in the company and a high level of power, are the primary stakeholders. Stakeholder power is the extent to which individuals or groups are able to influence, induce, or coerce 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 concerns individual investors, the other concerns institutional investors. Not only individual investors but also institutional investors are important to the organization as they provide liquidity to the organization. Institutional investors are organizations that pool large sums of money and invest those sums in securities, real estate, and other investment assets. Institutional investors may have some influence in 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 huge amounts of money for immediate investment and they have a lot of power. Institutional investors may react to the company, based on the company's CSRD activities. Therefore, this study attempts to examine the impact of corporate social responsibility disclosures on OI in the Sri Lankan context. 1.3 Problem Statement Different authors found different results when checking 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 toward CSR and sources of information on activities. They learn that investors generally do not change their investment decisions based on the company's CSR statement. In the Sri Lankan context, there are 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 between the financial performance measure of return on equity and return on assets in the Sri Lankan banking sector. Research by Abeysinghe and Basnayake (2015) reveals that there is a negative relationship between CSR disclosures..