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DFCC Bank

DFCC Bank. Good Corporate Governance in Practice. Outline. What is Corporate Governance? Regulatory Requirements for Banks in Sri Lanka DFCC Practices - Key Elements Code of ethics Enterprise Governance Board Composition

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DFCC Bank

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  1. DFCC Bank Good Corporate Governance in Practice

  2. Outline • What is Corporate Governance? • Regulatory Requirements for Banks in Sri Lanka • DFCC Practices - Key Elements • Code of ethics • Enterprise Governance • Board Composition • Board Responsibilities • Investor relations • Role of Company Secretary • Disclosure

  3. What is Corporate Governance? • Many definitions • “The framework of rules and practices by which a board of directors ensures accountability, fairness, and transparency in a company’s relationship with its all stakeholders (financiers, customers, management, employees, government, and the community)”.[Source: Business Dictionary.com]

  4. Regulatory Requirements for Banks in Sri Lanka Mandatory and prescriptive direction issued by Central Bank of Sri Lanka. • Key elements: • Board composition • Qualifications for directors • Demarcation of the roles of Chairman and CEO • Prescribed duties and qualifications for Board • Identification of Related Parties and prescribed procedures for Related Party transactions • Mandatory disclosures in the Annual Report

  5. Code of Ethics Based on OECD principles of good governance • Corporate Values • Whistle blowing policy • Customer Charter • Social Responsibility • Closed period-dealing in Co shares, directors/employees

  6. Enterprise Governance • Strategy formulation • Review of performance • Alignment of performance targets to KPI’s • Risk Management • Legal & Regulatory framework • Delegation – extent & review • Division of responsibility • Transparency

  7. Board Composition • Directors - Executive/Non executive • Non executive Chairman • Independence of Directors • Separation of Chairman and Chief Executive Officer • Board Committees • Board Nomination policy • Self Assessment

  8. Board Responsibility • Act with good faith with due diligence and care • Treat all stakeholders fairly • Review of corporate strategy • Role of chairman – leadership & stimulates discussion • Attendance at Board meetings • Policy on independent professional advice • Oversight of related party transactions • Avoidance of conflicts of interest • Identification of matters reserved for Board

  9. Investor Relations • Communication Policy • Timely reporting of financial performance • Dissemination of price sensitive information • Timely notification of shareholder meetings/agenda • Free transferability of shares • Equal rights • Maintenance of help desk

  10. Role of Company Secretary • Statutory & regulatory functions • Secretariat services to Board/shareholders • Access to Directors • Guidance on directors responsibilities • Minutes of meetings • Directors’ interest register

  11. Disclosures • Financial and operating results • Corporate objectives • Major share ownership • Remuneration of Board & Key management • Related party transactions • Risk framework • Internal Control framework • Auditors report – external & internal

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