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Wednesday, 28 June 2017 00:00 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
The Sri Lanka Institute of Directors (SLID) elected Commercial Bank Deputy Chairman Preethi Jayawardena as President, succeeding Shiromal Cooray at the Annual Membership Meeting (AMM) held in Colombo last week.
In his address newly-elected President Jayawardena said the main objective of the organisation would be to uplift budding young directors and fine-tune existing directors during this year.
Pointing out that we live in a world which changes at a rapid pace, he said risk management had become a crucial daily routine of every company to sustain in the marketplace.
“Everything around us is changing very fast. The financial markets are all complex and interconnected. What happens in the other corner of the world has ripple effects in this part of the world. Therefore, risk management is a critical daily practice,” he added.
He stressed that companies need to thrive ethically and efficiently.
“The SME sector is the backbone of our economy, but they need to be guided to do business not only based on ethics but efficiently as well. We need to minimise income distribution inequality. There is no point boasting about $4,000 per capita income. What is the meaning of getting the rich man richer, while the poor get poorer? We need to revamp this situation as it will boost investor confidence,” he noted.
Jayawardena pointed out that Sri Lanka can no longer depend only on tourism, exports and foreign remittances. “We need Foreign Direct Investments (FDIs) to uplift our country. Last year we were unable to draw in $1 billion worth of FDIs. We need to address this situation immediately.”
The Annual Report and Financial Statements for the period ending 31 March were also presented and approved by the membership. SLID will also continue with its regular annual events, which add value to its membership.
On a personal note, Jayawardena thanked Immediate Past President Cooray for her leadership given not only during her two-year tenure as the President of SLID, but as a founding member who assisted the institution to reach what it is today.
Pix by Ruwan Walpola
Chief Guest Special Assignments Minister Dr. Sarath Amunugama commended the contribution of SLID members to economic growth over the years.
“As far as the Government is concerned, we think the private sector is the engine of growth. The private sector not only includes the big names, but also the SMEs which have been growing at a very rapid pace during the last decade bringing in goods and services to a fast-growing consumer society. We look up on you as a crucial aspect of economic development in this country,” he added.
With rapid developments taking place in various parts of the country, he said it opened up many opportunities, particularly for the private sector.
“When it comes to the private sector, it is very important to remember that it is you, the directors, who provide it with the management capacity. Though very often people talk of capitalists, of the super-rich, in fact with the growth of corporates we have a different type of ownership in this country. That is the most desirable system; where large numbers of shareholders participate in large companies, they all have a share in the fortunes of the company.”
Dr. Amunugama emphasised that managers and directors of corporates drive to use the resources available, largely through public participation, to give the highest possible returns to the shareholders invested in that company.
He said the economic model is now moving from the capitalist moguls to corporate institutions which are well managed and are instruments of fast economic growth. “If you look at the US economy, it is all run by large corporates which are held by many shareholders. It is the duty of the directors to ensure that they deploy the resources at their command and give a very reasonable return to all those shareholders.
“We are thinking of a same model for the country, where a large number of shareholders participate in driving these corporates forward, for which they have to get a return. We have to ensure that we give a decent return to the partners, which is part of modern capitalism. It is not ownership that matters so much, but management skills,” the Minister said.
It was pointed out that Sri Lanka should make use of the growing middle-class in the region, which all other countries are looking at entering.
“Sri Lanka’s greatest asset is our geographic location. We have a built-in advantage, which we are trying to make use of via various trade ties with India, Pakistan, China, Singapore and Japan, all with the idea of stimulating a global and regional market,” he added.
Dr. Amunugama said it was necessary for corporates to understand the transition from a domestic market to a global marketplace. “For this, the corporate sector may have to go into joint ventures to attract foreign investors.”
In addition to traditional exports, he said the IT/BPO sector has contributed significantly to export earnings during a short span of time and insisted it was time to grow the industrial sector as well with Hambantota opening up for trade and investment.
Agreeing with Jayawardena over FDI figures last year, he said: “It was shameful. Not $1 billion worth FDIs, I think last year we couldn’t even draw $500 million, it was around $400 million.”
However he said things would soon change with the Government planning to sign the Hambantota Port deal next week with the Chinese company.
“There will be a substantial change in our FDIs as we sign Hambantota Port next week, which will attract $1.1 billion. We hope we will be able to reach $2 billion FDIs this year and sustain the same level over the next two years to come,” he stated.
According to the Minister, the first step of setting up the joint venture Hambantota Development Corporation will be formulated in the next two months.
“The opening up of the industrial zone in Hambantota will bring in a lot of investments. The concluded agreement has confirmed 400 companies already at the zone. We need captains of industries who can response to these opportunities fast,” the Minister asserted.
