The Central Bank has issued directions on corporate governance for Licensed Commercial Banks and Licensed Specialised Banks in terms of the provisions under Section 46(1) and 76J(1), of the Banking Act No. 30 of 1998. These directions will be effective from January 1, 2003.
These directions have been developed on the basis of certain fundamental principles of corporate governance. The main aspects covered are the broad responsibilities of the board, board's composition, criteria to assess the fitness and propriety of directors, management functions delegated by the board, separation of duties of the Chairman and Chief Executive Officer, board appointed committees in relation to integrated risk management, audit, nomination and human resource and remuneration, related-party transactions and disclosure of financial statements.
A number of transitional provisions on several key aspects of these rules have been provided to facilitate smooth transition to these new standards.
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