By Chandra Jayaratne –
The Institute of Chartered Accountants
30A Malalasekera Road,
Re: Code of Best Practice on Corporate Governance
I understand that the Code of Best Practice on Corporate Governance 2013, issued jointly by the Institute of Chartered Accountants and the Securities Exchange Commission of Sri Lanka in 2013, is due to be revised and re-issued soon.
I was rather surprised on hearing the above informally communicated information. I nor business, professional and civil society colleagues, with whom I am acquainted, had no prior knowledge of the purported revision and publication, nor had any of them seen any formal media references nor a discussion draft, all of which have been steadfast practices repeatedly adopted by the Institute hitherto.
If my understanding as set out above is correct, I deeply regret the adoption of a process that has cut out the essential good governance practice of bringing out a revision to the Code, only after following a due process and transparent publication of a discussion draft, followed by due reviews and joint consultations transparently engaging with members, other professional bodies, chambers, the Institute of Directors, the Colombo Stock Exchange, minority shareholder groups, governance activists, law enforcement institutions, the Central Bank and other closely connected stakeholders.
I am of view, for the undernoted additional reasons, which were not applicable during the periods previous revisions were implemented, that a consultative process as described above is now an essential priority, and must precede the formal publication of the revision:
1. The present government is committed to upholding transparent good governance practices, minimizing waste and corruption and expects these values to drive and be upheld also by the stakeholders of society
2. The vision 2025 places high emphasis on the expansion of international Trade, foreign direct investments, public private partnerships, socio-political-economic and environmental good governance, enhancement of productivity, quality and research and technology transfer driven innovations, with the private sector becoming the key engine of growth .
3. The expectations of the governance framework and potential international investors of corporate commitments, ensuring the prevalence of good governance and rule of law in the management practices of the state, state enterprises, the private sector and professionals.
4. The stakeholder expectation of adherence to accounting and auditing standards and ensuring financial statements are comprehensive true, fair and investor friendly and without any misrepresentation or concealment of information, related party transactions and conflicts of interests
5. The expectation of the emergence of a significantly reduced informal economy
6. The essential need to minimize corporate failures, and ensure regulatory and tax compliance
7. The expectation that the private sector will promote sustainability, minimize the carbon foot print and promote corporate social responsibility
8. The assuring that high profile scams, frauds, misappropriations, forgeries, breach of trust, money laundering, bribery, corruption, minority oppression are only case studies from the past
9. The Institute having adopted a Code of Ethics and Conduct, including member commitment to effectively respond in instances of Non Compliance with Laws and Regulations
10. The expectation that leaders in governance, professions and corporate entities will have in place requisite commitments and controls to assure due compliance with agreed core value principles, ethical practices with governance structures and management practices benchmarking international best practices,
In the above context, I appeal to you to ensure that any processes which attempts to expedite the release of the revised Code of Corporate Governance, by eliminating, cutting down or short circuiting of the essential good governance practices hitherto followed in bringing out a revision to the Code will not be permitted by you and the Council. I fervently hope that you and the Council will ensure the adherence to a due process and transparent publication of a discussion draft, followed by due review and joint consultations with all stakeholders prior to publication of the revised Code.