June 16, 2008 (LBO) – Sri Lanka’s Central Bank said it has prepared a draft code of corporate governance for registered finance companies, based on the directions issued to licensed banks, that will come into effect from January 2009. It said in a statement that the draft took into consideration the views expressed by the Finance Houses Association of Sri Lanka and registered finance companies on a previous draft.
“The exposure draft is expected to be issued as a direction to the registered finance companies from January 1, 2009 onwards,” the statement said.
“The direction is expected to strengthen the corporate governance practices in registered finance companies.”
The draft deals with the responsibilities and composition of the board of directors, board meetings, criteria to assess the fitness and propriety of directors, and management functions delegated by the board.
It also covers the appointment of the chairman and the chief executive officer, board appointed committees, related party transactions, disclosures and transitional provisions.
The regulator said it was releasing the draft (available on its website: www.cbsl.gov.lk) to solicit comments, and suggestions from the stakeholders of registered fin