|Thursday, 29 July 2004|
SEC recommends revision of ICASL code on Corporate Governance
A recent study of the International Federation of Accountants revealed that the failure of most high profile corporate audit reports are attributed on non compliance by the Companies with the principles of good governance and financial reporting and the failure of the governing bodies to monitor the same.
The report also highlights the important contribution various stakeholders can make in arresting such a situation.
Thus the Securities and Exchange Commission (SEC), recognising the importance of arresting such a situation, constituted a Stakeholder Committee comprising key Stakeholders of the Corporate Sector. The SEC in consultation with the Stakeholder Committee, reviewed the "Code of Best Practice on Corporate Governance" issued by the Institute of Chartered Accountants of Sri Lanka (ICASL) in relation to the internationally accepted Codes formulated by the US, UK, EU and OECD.
Following an exhaustive study, the Committee identified "gaps" for which revised and additional clauses were recommended to be included in the Code of ICASL. These recommendations were forwarded to ICASL along with the "Guidelines for Listed Companies (Audit and Audit committees)" drafted by the SEC and Communicated to all Listed Companies through the Colombo Stock Exchange (CSE) to be adopted voluntarily.
The SEC has called upon the ICASL to revise the relevant ICASL Code (s) and formulate one composite Code incorporating the recommendations within the next three months so that the SEC could issue same to the Listed Companies for voluntary adoption.
The main provisions of the composite Code would be subsequently incorporated in the Listing Rules of the CSE for mandatory compliance by the Listed Companies. It is also expected that this composite Code be co-branded as the 'ICASL/SEC Code on Corporate Governance'.
The SEC appointed Stakeholder Committee comprised Ranjit Feranndo (Chairman of the Committee), Nivard Cabraal, Principal Consultant, Cabraal Consulting Group (Pvt) Ltd., Arittha Wikramanayake, Partner, Nithya Partners, Hemaka Amarasuriya, Chairman, Singer Sri Lanka Ltd., B. R. L. Fernando, Chairman, CIC Group of Companies, Prof. Willie Mendis, Senior Professor, University of Moratuwa, V. Kandasamy, Deputy Auditor General, Ms. L. Seresinhe, Director Corporate Affairs (SEC) and Benny Tissera, Director, Supervision (SEC).
Produced by Lake House