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CA Sri Lanka and SEC issues revised Code of Best Practice on Corporate Governance

The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) together with the Securities and Exchange Commission (SEC) ceremoniously launched the revised Code of Best Practice on Corporate Governance at a ceremony held in Colombo recently.

Good corporate governance is fundamental to an organization’s competitiveness, growth and most importantly its sustainability. Strong business ethics, sound policies and procedures, along with effective monitoring systems are considered as vital ingredients of a well-established corporate governance system. With these objectives in mind, CA Sri Lanka and SEC formulated the latest code after reviewing and revising the previous corporate governance code which was issued in 2008.

The launch event saw an impressive participation with chairmen, CEOs and directors of listed companies in Sri Lanka, regulators and representatives of professional institutes in the country attending the event.

CA Sri Lanka President, Mr. Sujeewa Rajapakse noted that while most of the listed companies in Sri Lanka are following this code, there were still a sizable amount of companies who are yet to join in this important initiative which promotes corporate fairness, transparency and accountability.

He said that, the institute understood the importance of corporate governance, and therefore pioneered in introducing the good corporate governance principles in Sri Lanka was back in 1997, which was subsequently updated in 2003 and then in 2008.

“Corporate Governance is a dynamic force that keeps evolving. Therefore, taking into account the changes taking place in other parts of the world, a special committee was appointed in 2011 to review and revise the Code of Best Practice on Corporate Governance which was issued in 2008. The latest publication is a result of the endeavors of this committee which was co-chaired by Mr. Asite Talwatte and Mr. Sujeewa Mudalige, who are both past presidents of our Institute,” he said.

Mr. Rajapakse noted that as Sri Lanka strives to achieve ambitious economic goals, applying such codes are important for companies, as it will help the nation become truly prosperous.

“At a time when we are inviting foreign investments to the country, Sri Lankan companies must seriously take action to implement the Corporate Governance Code, as it reflects well on an organization as well as on the country. Therefore, I believe the revision of the code is a timely effort to ensure that the corporate governance principles remain relevant and in line with international best practices,” Mr. Rajapakse added.

Chairman of the Securities and Exchange Commission Dr. Nalaka Godahewa said, at a juncture when Sri Lanka is striving to achieve medium and long term economic growth above 8%, companies that are governed according to these standards can support finance economic growth by attracting capital efficiently and effectively. “Therefore good corporate governance plays a critical role in ensuring not only corporate success but also promote economic growth,” he said.

“Upholding the virtues of corporate governance indicates not only accountability to shareholders, greater transparency and fairness but it promotes the role of companies in the creation of wealth of the nation,” Dr. Godahewa added.

The event concluded with a panel discussion featuring Mr. Asite Talwatte, Co Chairman of the Corporate Governance Committee, Dr. Nalaka Godahewa, Chairman of SEC, and committee members Dr. Harsha Cabral, Mr. Ronnie Peiris, and Ms. Priyanthi Peiris. The discussion was moderated by Mr. Sujeewa Mudalige, Co Chairman of the Corporate Governance Committee.