Corporate governance has become a key priority on the agenda of capital market regulators and is considered an important factor in strengthening capital markets, said Securities and Exchange Commission (SEC) Chairman Thilak Karunaratne.
“Implementing sound corporate governance practices that comprise clear and transparent disclosures, encourage accountability and ethical leadership create value for companies, facilitate access to capital and enhances investor confidence.”
He was speaking at the CA Sri Lanka “Code of Best Practice on Corporate Governance 2017.”
“I believe that while a lot has been done in the area of corporate governance, Sri Lanka needs to ensure a responsive regulatory framework and cannot afford to fall behind. Furthermore, good market conduct is driven by good behavior and not by rules and regulations alone.”
Corporate governance codes and frameworks were triggered as a result of corporate scandals that adversely affected capital markets across the globe, he recalled.
He said that it is sad to note that the current regime in the USA is trying to roll back these regulations brought in after the last financial crisis by directing a review of the Dodd-Frank Act.
He disclosed that the ASIC website indicates that Australia does not have a general corporate governance code that all companies must comply with. However, listed companies must benchmark their corporate governance practices against the Australian Securities Exchange Corporate Governance Council’s Principles and Recommendations.
“This means that listed companies are not obliged to adopt the ASX Principles, but are encouraged to do so. This is to create a level of flexibility for listed companies to adopt alternative practices more suited to their circumstances.”
Commentating on the Sri Lankan aspect, he said that the corporate governance code was initially developed by the Institute of Chartered Accountants of Sri Lanka (ICASL) in 1997. Thereafter, it has been revised in 2003, 2008 and most recently in 2013.
The existing code is on a voluntary basis and could be used by any business entity. But the level of governance and degree of accountability expected from public listed companies are much higher. Therefore, the ‘one size fits all’ approach on above requires re-visiting.
Based on the approach adopted by other jurisdictions, the SEC Sri Lanka has started to pursue an initiative to ensure enforceability relating to governance is enhanced and grant oversight by absorbing the voluntary governance requirements into mandatory listing rules.
He also commended Chartered Accountants of Sri Lanka for their commitment towards upholding good corporate governance and business ethics.
www.dailynews.lk
“Implementing sound corporate governance practices that comprise clear and transparent disclosures, encourage accountability and ethical leadership create value for companies, facilitate access to capital and enhances investor confidence.”
He was speaking at the CA Sri Lanka “Code of Best Practice on Corporate Governance 2017.”
“I believe that while a lot has been done in the area of corporate governance, Sri Lanka needs to ensure a responsive regulatory framework and cannot afford to fall behind. Furthermore, good market conduct is driven by good behavior and not by rules and regulations alone.”
Corporate governance codes and frameworks were triggered as a result of corporate scandals that adversely affected capital markets across the globe, he recalled.
He said that it is sad to note that the current regime in the USA is trying to roll back these regulations brought in after the last financial crisis by directing a review of the Dodd-Frank Act.
He disclosed that the ASIC website indicates that Australia does not have a general corporate governance code that all companies must comply with. However, listed companies must benchmark their corporate governance practices against the Australian Securities Exchange Corporate Governance Council’s Principles and Recommendations.
“This means that listed companies are not obliged to adopt the ASX Principles, but are encouraged to do so. This is to create a level of flexibility for listed companies to adopt alternative practices more suited to their circumstances.”
Commentating on the Sri Lankan aspect, he said that the corporate governance code was initially developed by the Institute of Chartered Accountants of Sri Lanka (ICASL) in 1997. Thereafter, it has been revised in 2003, 2008 and most recently in 2013.
The existing code is on a voluntary basis and could be used by any business entity. But the level of governance and degree of accountability expected from public listed companies are much higher. Therefore, the ‘one size fits all’ approach on above requires re-visiting.
Based on the approach adopted by other jurisdictions, the SEC Sri Lanka has started to pursue an initiative to ensure enforceability relating to governance is enhanced and grant oversight by absorbing the voluntary governance requirements into mandatory listing rules.
He also commended Chartered Accountants of Sri Lanka for their commitment towards upholding good corporate governance and business ethics.
www.dailynews.lk
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