Public consultation before mandating CEO/chairman separation: Sri Lanka SEC
ECONOMYNEXT – Sri Lanka’s capital markets regulator, the Securities and Exchange Commission (SEC), said it would introduce rules separating the roles of chairman and chief executive officer in listed companies only after stakeholder consultation.
“Corporate governance provisions for the separation of the chairman and chief executive officer roles in listed companies were to be introduced only after stakeholder consultation,” said Ranel Wijesinha, chairman of the SEC.
A statement said the SEC aims to conduct the forum to discuss a wide variety of matters within the next week or two.
The SEC said it is committed to building a “robust, well regulated and attractive capital market.”
“Towards that end, we benchmark ourselves against a wide variety of jurisdictions that are members of the International Organization of Securities Commissions (IOSCO), of which SEC Sri Lanka is an active member for more than 15 years.”
Over more than two and half decades, the SEC and the CSE have worked closely with the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka), which developed its ‘Codes of Best Practice on Corporate Governance’, based on the work of regional and global organisations, of which CA Sri Lanka is a member.
“In essence, we bring to bear upon our deliberations the latest developments in the field,” Wijesinha said.
“However, we are not simply driven by best practices of other jurisdictions alone or by rankings of the World Economic Forum or the Global Competitiveness Rankings or Competitiveness Rankings, or ‘Doing Business Index’ of the World Bank.”
Wijesinha said a decision was taken at the end of the third quarter of 2018 to subject the issue of separating the roles of chairman and chief executive when the Commission responded to a proposal he made that in the Sri Lankan corporate context, it is a key measure, which requires the consideration of multiple perspectives.
“The Commission at a meeting early this year resolved to conduct a public consultation.”¬
A series of consultations on key issues involving the SEC, Colombo Stock Exchange (CSE), and the broking community and other stakeholders were begun when the Commission was constituted in June 2018.
“The healthy interaction, open and transparent approach, the positive, constructive and proactive dialogue has worked well so far, and we have taken a decision to also adopt this approach to a “Dialogue with Listed Companies” to be hosted by the SEC."
“This “Dialogue” to be scheduled for October/November 2018 was postponed due to the political situation, which prevailed.”
(COLOMBO, March 14, 2019-SB)