SEC says segregation of CEO and Chairman roles only after stakeholder consensus

Stock market regulator, the Securities and Exchange Commission (SEC) maintains that any measures towards segregating Chairman and CEO roles will only be taken after detailed discussions and broad consensus among relevant stakeholders. 

SEC last week published a new public consultation paper seeking public views to strengthen corporate governance rules of listed entities, covering key areas including policies, board and conduct, board subcommittees, relations with shareholders and investors and disclosures in annual reports.

A proposal to segregate the roles of CEO and chairperson being performed by the same person was also included in the consultation paper.

According to the SEC, the rules are still in the form of a draft and have been compiled taking in to consideration the proposals that emanated pursuant to detailed discussions it had with various stakeholders including, eminent personalities representing listed entities, representatives of Sri Lanka Institute of Directors, President and Council members of CA Sri Lanka, Former Chairman, Current Chairman and members of Corporate Governance Committee of CA Sri Lanka, representatives of CFA Society Sri Lanka, members of audit firms, representatives from Sri Lanka Accounting and Auditing Standards Monitoring Board, Insurance Regulatory Commission of Sri Lanka, Central Bank of Sri Lanka, CSE and representatives of the SEC.

The regulator also maintained that the purpose of the public consultation paper 2021/01 on ‘Revising Corporate Governance Rules Applicable to Entities Listed on the Colombo Stock Exchange’, is to obtain proposals from all interested parties and the general public so that those proposals could be taken in to consideration and incorporated in finalizing it.

 “We wish to re-iterate that these rules are still in a draft form and will only be finalised upon the receipt of the proposals that have been called for, and after they are once again deliberated and consensus is reached by the stakeholders,” SEC Director External Relations and Capital Market Education Tushara Jayaratne said.