April 24, 2008 (LBO) – Sri Lanka’s central bank has given more time for founding directors and chairmen of banks to serve on the boards beyond the original nine years specified by the regulator. “These additional transitional provisions give special consideration to the role and contribution of Founding Directors and Incumbent Chairmen to the promotion and stability of the banks, and the technical and professional expertise that is contributed by executive directors,” the central bank said.
The directions limiting directors to serve only nine years attracted a storm of protest from the industry.
The central bank said in addition to the chief executive officer executive directors would also be permitted to function as directors for more than nine years.
The central bank said applications to increase the tenure of directors would be permitted on a case by case by the Monetary Board for up to five years.
“It is envisaged that these amendments would enhance the smooth transition within the boards of directors of banks in complying with the new Directions, which are expected to enhance the corporate governance practices in banks, thereby promoting a safe, sound and stable banking