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Adoption of Revision to Code of Best Practice on Corporate Governance


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Observations for review and evaluation within due process of stakeholder consultation

By Chandra Jayaratne

  • Where the public company is a conglomerate with subsidiaries and associate companies board responsibilities, regular information needs and role as set out in A.1.1 and A.1.2 will require further amplification or cross reference to a separate section/schedule. Similar references will be necessary re A.2, and A.3
  • Reference A.5 – Board balance should also make reference to encouraging gender diversity
  • Reference A.7.3 – Include a statement confirming that there are no conflicting interests nor significant related party interests and if not provide full details 
  • Reference A 10.1 – Include a statement confirming that there were no conflicting interests nor significant related party interests impacting on board decision making and if not provide full details thereof
  • Reference C.3 and D.1.4 – The directors’ report must confirm that the provisions of Company Law in relation to major transactions and serious loss of capital have been duly complied with and assure that the details of the ultimate parent company is also disclosed
  • Reference D.2.3 –In addition the function must ensure that an agreed plan of internal audit is in place and effectively completed 
  • Reference D 5 – There must be a firm commitment to strictly ensure adherence to  a NOCLAR (non-compliance with laws and regulations) process and not merely an encouragement, along with an extended commitment for the directors report to state and affirm effective due compliance with such processes. Here it is important bring in the due encouragement and facilitation of a process of promoting whistle blowing.
  • Re D.5.1 - The directors’ report must affirm that due compliance processes were in place in upholding business standards inter alia including the following:
  • Whistle blowing
  • Conflicts of interest
  • Bribery and corruption
  • Entertainment and gifts
  • Respect in the workplace and avoidance of harassment
  • Human rights 
  • Political contributions
  • Charitable contributions
  • Accurate accounting and record-keeping
  • Protection of corporate assets
  • Confidentiality and information security
  • Insider dealing and market abuse
  • Competition and anti-trust laws
  • Money laundering and anti-terrorism
  • Fair trade practices
  • Illicit trade in the group’s products
  • nSanctions
  • The need to specify the role of the board in assuring the independence, professionalism, integrity and capacity of the external auditor and the effective management of conflicts of interests and related party interest of the external auditor
  • The directors must ensure that robust and effective systems, processes, procedures and oversight mechanisms are in place to assure that
  • Know Your Customer validations are effective
  • Evasion options of Tax and Customs Duty, Excise and other State levies are minimised and controlled
  • Bribery and corruption are minimised and controlled
  • Acceptable Best Practices of managing transfer pricing options are in place
  • Opportunities for engaging in any arrangements for concealing, disguising, conversion, transfer of criminal property or terrorism linked financing are minimised and controlled
  • Consumer pubic interests of safety and quality of goods and services and after service commitments and warranties are delivered
  • All public communications, advertisements and promotions targeting stakeholders are accurate and free of any misrepresentation and follow ethical best practices
  • Responses under Right to Information Act and declarations under Securities Act, Insurance Act, Banking Act, Leasing Act, Finance Companies Act and Companies Act are diligently prepared and are accurate and sufficiently explicit for the purpose 
  • All fund transfers, connected with related party transactions, transactions tainted by non-compliance with laws and regulations and or conflicts of interests to be separately identified in the cash flow statement attached to the audited accounts, tagged by explanatory notes.

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