National Code of Corporate Governance
The National Committee on Corporate Governance has in accordance with section 65(c) of the Financial Reporting Act 2004 issued the Second Edition of the National Code of Corporate Governance (the ‘Code’).
Consequently, the Financial Services Commission (the ‘FSC’) has issued a Circular Letter on the Code to inform licensee of their obligations with respect to the new code which is applicable as from the reporting year (financial period) ended 30 June 2018.
We are pleased to share with you a summary of the Circular Letter:
The principles of the Code
The Code adopts a ‘principles-based’ approach and the core of the Code consists of 8 corporate governance principles (the ‘Principles’) namely;
- Governance Structure
- The Structure of the Board and its Committees
- Director Appointment Procedures
- Director Duties, Remuneration and Performance
- Risk Governance and Internal Control
- Reporting with Integrity
- Audit; and
- Relations with Shareholders and Other Key Stakeholders.
To whom does the Code apply?
- Licensees having the statutory obligation to comply with the Code
- Licensees providing financial services.
The implications of the provisions
- All Licensees required to comply with the code should apply the 8 principles in accordance with the nature of their business and inspire themselves from the specific guidance when same is applicable
- Where a relevant licensee is required to comply with Corporate Governance requirements in a foreign jurisdiction, it may, with the prior approval of the FSC, comply with the foreign requirements in lieu of the requirements of the Mauritian Code. The FSC may impose any condition when giving any approval
- Relevant licensees should disclose compliance with the Code on an ‘apply and explain’ basis in the manner laid out in the code. They should also inspire themselves from the guidance provided in the Code and make other appropriate disclosures.
- All relevant licensees shall ensure that their Annual Reports/ Audited Financial Statements are accompanied by a Directors’ Statement of Compliance with the Code in the form and manner provided in the Code.
- The auditors of the relevant licensees shall assess any explanation in cases of non-compliance and shall make a report in the form and manner provided in the Code.
- The FSC, as the regulator of non-banking financial services and global business sectors will monitor the application of the Code and adherence to corporate governance principles by the relevant licensees.