Corporate Governance
Policy on matters relating to the Board of Directors
- Executive and Non-Executive Directors composition
In keeping with the commitment of Ceylinco Holdings PLC to maintain principles of integrity and transparency in business operations which facilitates good governance, the Company’s policy is to have an appropriate blend of Executive, Non-Executive and Independent Directors to maintain the independence of the Board and to separate the Board functions of governance and management. Towards fulfilling its stewardship role, the majority of the Company’s Board of Directors consists of Non-Executive Directors and at least 1/3 rd of the Board Members are Independent Non-Executive Directors. This combination serves to enrich Board discussions and bring objective judgement to Board decisions. - Minimum Board Composition
Being the parent company of several diversified conglomerates, the company believes in having a minimum number of 16 members on the Board possessing the required qualifications, experience and skills. - Roles and functions of Chairman/CEO
The functions of Chairman and Chief Executive Officer can be vested in one individual. Due to the diversity and scale of operations of the Group, the Board is of the view that this is the most appropriate arrangement for the Company.The responsibility of the Chairman /CEO is to provide effective leadership to the Board in addition to his responsibility to ensure the effective management of the Group. He plays a key role in devising and reviewing Group strategies for discussion and approval by the Board. He creates the vision for the businesses in the Group and supports the Board in developing appropriate strategies to achieve long term goals.
- Procedures for appraisal of Board performance and CEO performance
The Board performance is reviewed annually by comparing results achieved against the Plan/budget. Independent Directors’ views are considered in evaluating the performance of Executive Directors and discussions are held to consider improvements to Board performance. - Rationale for combining position of Chairperson and CEO
The unparalleled experience, expertise and visionary leadership demonstrated over the years by the Chairman was the main reason for combining the role of Chairperson and CEO. - Functions of the SID and measures taken to safeguard the Interests of the Board.
The Senior Interdependent Director provides a sounding board for the Chairman and acts as an intermediary for the Non-Executive Directors.He helps to maintain a balance in the board decision making. SID is accessible to shareholders should they have any concerns, where communication through regular channels has not been effective or where such channels are inappropriate. In addition, the Non-Executive Deputy Chairman on the Board provides an effective mechanism to maintain the balance on the Board.
- Diversity in Board Composition
The Company recognizes experience, competencies, gender, age and industry exposure in appointing Directors. In order to maintain a balance of skills on the Board, appointments to the Board are made after considering individuals with the appropriate qualifications, expertise and experience. Diversity maintained in Board appointments ensures sustainability and growth in the Company.
Whilst the Executive Directors bring with them, diverse expertise with in-depth knowledge of the business and having the ability to implement a comprehensive system of internal controls, the Non-Executive Directors provide independent insight and experience to the Board. - Maximum number of Directors and rationale
Considering the scale of operations of the Company and its subsidiaries operating in several key distinctive industry sectors, a maximum of 16 Directors on the Board would be appropriate to control the operational management and oversight for the full range of activities of the Group. The Group has diversified its activities to cover General Insurance, Life Insurance, Healthcare, Education, Power generation and Investment management. Besides, the businesses are operated within and outside Sri Lanka. The diversity of expertise and skills required on the Board justifies the number of Directors. - Frequency of Board meetings
In order to evaluate the performance of the Company and its subsidiaries, it is necessary to have a Board meeting once in two months. In the event of any special circumstances, additional Board meetings are held. - Mechanisms for updating Directors on Listing rules
The agenda of Company Board meetings include discussions on matters relating to regulatory changes. Directors are appraised of changes to Listing Rules and other regulations, in a timely manner. - Minimum of numbers of meetings Director should attend
It’s expected that Directors should attend at least 75% of meetings held in a year, to ensure that as many directors as possible are involved in discussions and decision making although full attendance is always encouraged. - Requirements on trading of listed shares and disclosure
Directors could trade Company’s shares. It’s a requirement that disclosure of any transactions should be made to the Company. - Maximum number of Directorships in listed Entities
As a best practice, Directors are required to limit their directorships to 20. - Right to participate in meetings by way of audio visuals
In order to ensure participation in Board meetings/Subcommittee meetings, the Right is given to Directors to participate by way of audio visuals.
b: Policy on Board Committees
The Board has delegated specific functions to several Board Committees to assist in the discharge of its duties. The mandate of each committee is formulated in formal sub-committee charters. When determining the committee composition, the Board considers relevant regulations, the skills and experience of its members and the responsibilities of each committee. Chairmen of the committees are responsible for the effective functioning of the committee. The committees are given clearly defined mandates and the frequency of meetings are agreed upon.
Audit and Risk Committee
The Audit and Risk Committee assists the Board in its oversight and monitoring of financial reporting, risk management, internal control aspects, and compliance with financial and regulatory requirements.
Remuneration Committee
The Remuneration Committee activities include periodically reviewing the remuneration policy of the company including the compensation paid to Directors and senior management.
Nominations and Governance Committee
The Nomination and Governance Committee activities include nomination, selection and recommendation for the appointment of Non-Executive Directors, CEO and Key senior officers, and succession planning for Key Management Personnel.
Related Party Transaction Review Committee (RPTRC)
RPTRC is in place to ensure that the interests of shareholders are safeguarded and there is adherence to the regulatory requirements.
c. Policy on Corporate Governance, Nominations and Re-election
The governance policy and structure of the Company ensures that the Board has the required level of oversight on matters that are material to the Company and Group.
The delegation of authority gives a clear direction on decision making. Each decision taken aligns with Company culture and values and considers the benefits, the risks, the financial implications and its impact on the relevant stakeholders. The Board is reinstated at regular intervals through new appointments, retirement, resignation, and re-election. Board reinstatements allow for the introduction of members with new skills, insights, and perspectives, while retaining valuable industry knowledge and maintaining board effectiveness.
Board appointments are made in a formal and transparent manner, as determined by the Nominations Committee which assesses the Company and Group’s strategic demands as well as the proficiencies and capabilities of the Board. Profiles of requirements are drawn up and prospective candidates are selected by the Nominations Committee prior to endorsement to the Board. The Board considers the endorsements of the Nominations Committee and recommends suitable candidates for appointment or re-election by the shareholders at the Annual General Meeting.
Appointments of new Directors are communicated to the Colombo Stock Exchange and shareholders by way of an announcement. The Nominations committee is assigned the task of selection and recommendation of new Directors/re-election, CEO and key senior officers and monitors succession planning for key management personnel.
d. Policy on Remuneration
The remuneration committee determines the remuneration policy andcompensation packages to be paid to Directors and senior management of the Company. Executive Directors/senior management review the remuneration of all staff and make necessary changes annually. In considering the salary and benefits, the management looks at experience, qualifications, contribution, designation and market rates.
Compensation of Non-Executive Directors is determined in reference to the contribution made by them in achieving the agreed goals of the Company and serving as members of Committees. Non-Executive Directors are not entitled to receive any performance-related / incentive payments.
e. Policy on Internal Code of Business conduct and Ethics for all Directors and employees, including policies on trading in the Entity’s listed securities.
The Company and Group’s corporate structure, business, operations and disclosure practices have been strictly aligned to our corporate governance philosophy. transparency, accountability, fairness and intensive communication with stakeholders are integral to the Company and Group’s activities.
The Code of principles/terms and conditions of employment are distributed to each new employee of the Company and Group upon commencement of his/her employment with the company/subsidiary and may also be circulated at other
Each recipient will be asked to sign an acknowledgement of his/her letter of appointment confirming that he/she has understood the terms of engagement/employment with the company and his/her willingness to abide by these terms.
The Company expects all Group employees to comply with all laws, including anti-trust, anti-bribery, environmental and safety laws, and all rules and regulations imposed on the company by respective regulatory authorities. Each company Board of Directors and employees are expected to act with integrity, use good judgment and common sense in seeking to comply with all applicable laws, rules and regulations, and particularly those relating to accounting and auditing matters and to ask for advice from a professional body, if there is any uncertainty whether a situation may violate any applicable laws.
The Company is registered on the Colombo Stock Exchange for share trading activities.
A prior prohibition notice of trading activities regarding the Company’s listed securities is forwarded to Directors by the Company Secretary. This notice carries the dates of Company intends to release interim results of Ceylinco Holding PLC during the financial year. As such connected parties are requested not to trade in shares of the Company during the period surrounding these dates. Further any changes to these dates would be informed of in advance. intervals.
f. Policy on Risk management and Internal controls
An ongoing process is in place to identify and manage risks that are associated with the businesses and operations of the Company and its subsidiaries. The Board of Directors reviews this process through the Audit and Risk Committee and the Strategic Committee.
The Audit Committee reviews the efficacy of the internal control system and compliance with regulatory requirements and the Company’s accounting and operational policies through the internal/external audit functions.
Strategic Committees stay focused on Company and subsidiaries’ organizational resiliencies, in the presence of distinctive risks such as credit, market, operational, capital, and liquidity being influenced by both internally and externally driven
g. Policy on Relations with Shareholders and Investors
The Board of Directors values the information rights of all shareholders and is committed to the practice of balanced, transparent, and timely disclosure. Company Annual General Meeting (AGM) provides shareholders with the opportunity to share their views and to meet the Board, including the Chairman of Board committees and Key Management Personnel. Required disclosures as per listing rules and other regulations are made. Shareholders could communicate with the Company to clarify any concerns and deal in an appropriate manner.
At the AGM, the Company’s financial performance for the preceding year is presented to shareholders. The company’s external auditors are also present at the AGM to answer shareholders’ queries.
Annual Report of the Company is made available to Shareholders as a printed copy upon request, and QR code which has been distributed via the circular issued to shareholders. Moreover, the Annual Report has been made accessible through the Ceylinco Holding PLC website and Colombo Stock Exchange site.
The Board of directors believes shareholder engagement is a vital tool to gain insights into shareholder expectations, interests, and preferences, which may influence the Company’s future strategic direction. Hence, the Board of Directors look forward to obtaining feedback of Shareholders. Therefore, the Board of Directors invite shareholders’ recommendations and thoughts to be sent to
ciccosec@ceyins.lk or
The Company Secretary
Ceylinco Holding PLC
5 th Floor, Ceylinco House,
69, Janadhipathi Mawatha,
Colombo 01.
developments.
h. Policy on Environment, Social and Governance Sustainability
Whilst understanding the importance of sustainability, a subcommittee is assigned the task of analyzing in detail and recommending any suitable action to be taken at Board level. The Company recognizes changes in the environment, rules and regulations and social aspects and required actions are implemented to ensure sustainability of the business.
The subcommittee maintains a continuous and ongoing review of the Company and Group sustainability performance. The Committee is empowered with reviewing the Company and Group’s cost saving efforts to determine their relevance vis-a-vis the evolving economic, social and environmental contexts. The Board of Directors retains the authority for approving the CSR projects that demonstrate the Company’s commitment to selected Sustainable Development Goals. The sustainability team is tasked with executing these projects and reporting the progress of such projects.
i. Policy on Control and Management of Company Assets and Shareholder Investments
Safeguarding the assets and resources of the Company and Group is of paramount importance to the Company. Detailed internal controls are established and regularly improved to protect and manage the assets. Similarly, various mechanisms are in place to manage the company’s investments to ensure that shareholders’ wealth is preserved, investment policy and Controls are implemented and regular reviews are being done.
The policy permits management staff to monitor and manage the assets and liabilities of the Company and its subsidiaries and to keep the Group’s liquidity at healthy levels, whilst satisfying regulatory requirements.
j. Policy on Corporate Disclosures
Corporate disclosure requirements arise from the listing rules and any other regulations. As a policy, its compliance is given high priority. Required disclosures should be made with sufficient detail on a timely basis. Further, disclosure requirements to be made in the Annual Report are complied with the concurrence of the Audit and Risk Committee.
The Company’s policy framework facilitates compliance with regulatory requirements and voluntary requirements as well as emerging best practices in corporate governance. Compliance table for the Continuing Listing Requirements of the Colombo Stock Exchange and the Code of Best Practice on Corporate Governance (2017) issued by CA Sri Lanka are stated in the Company’s Annual Report.
k. Policy on Whistleblowing
The company’s policy on Whistleblowing has been made available and explained to all employees.
i. Policy on Anti-Bribery and Corruption
The Company and its subsidiaries give its highest priority to the adherence of ethical practices and promotes a zero-tolerance policy towards corruption and bribery in all its transactions and strives to maintain a culture of transparency and honesty, resisting any attempts at fraud and corruption within the entire Group.
The Company and Group strives to ensure that ethical business practices are the norm from each business unit level, down to the individual employee. Its transparent control and prevention mechanisms also extend to its value chain, to its customers, suppliers and business partners. Any incidents of bribery/corruption are severely dealt with and appropriate action taken.
This policy is applicable to the Board of Directors and all employees of the Company and its subsidiaries. They should act against corruption in all its forms, including extortion and bribery.
