Corporate governance is essentially thought of as the way in which enterprises are directed and controlled. Studies have shown that good corporate governance not only enhances the image and reputation of a company, but produces direct economic benefits by making it profitable and competitive. This in turn creates more value for all stakeholders, Securities and Exchange Commission of Sri Lanka Chairman, Thilak Karunaratne said.
The advocacy of good corporate governance has come to the forefront of the business landscape owing to the numerous corporate governance transgressions that shook investor confidence in the past. To ensure responsible business conduct and governance structures, the majority of jurisdictions including Sri Lanka have introduced many corporate governance measures, he said. Karunaratne was speaking at the launch of ‘Code of best practice on corporate governance 2017’ at the Institute of Chartered Accountants Sri Lanka (ICASL) last week.
However, implementation of corporate governance is a challenge and all the regulations in the world cannot prevent corporate failures. Therefore, it is believed that a sound regulatory framework has to be complemented by self-discipline and a commitment to the spirit of corporate governance principles, he said.
“The practice of good corporate governance will also help in the robust inflow of investments to the country. It will reduce the cost of capital and promote efficiency in the operational process. Having an updated code of best practice on corporate governance and practicing the same will help boost share holder confidence while enabling a vibrant share market,” he said.
Corporate governance which is popularly understood to be the system by which companies are directed and controlled has been an issue which has resulted....in a great deal of comments and debates all over. It is a dynamic force that keeps evolving. Therefore, taking in to consideration global changes and the need to adhere to these changes locally, ICASL introduced the updated version.