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III. REVIEW OF CORPORATE GOVERNANCE PRINCIPLES
The assessment that follows is based upon the OECD Principles of Corporate Governance. They are concerned primarily with corporations traded on a stock exchange, though many of the issues addressed by the OECD Principles are also of relevance to large non-traded corporations and state-owned companies. Each statement is given a benchmark, based upon the country’s level of observance of the principle. Observed means that all essential criteria are generally met without any significant deficiencies. Largely observed means that only minor shortcomings are observed, which do not raise any questions about the authorities’ ability and intent to achieve full observance within a prescribed period of time. Partially observed means that, while the legal and regulatory framework may be fully compliant with the OECD Principle, practices and enforcement diverge. Materially not observed means that, despite progress, the shortcomings are sufficient to raise doubts about the authorities’ ability to achieve observance. Not observed means that no substantive progress toward observance has been achieved. Policy recommendations may be offered when the principle is not fully observed.
Section 1: The Rights of Shareholders
Principle IA: Partially observed
Description of practice: The CDS provides centralized depository and clearing and settlement services for shares of listed and OTC companies. Documents evidencing title to securities, whether or not listed on the Stock Exchange, are deposited with the CDS and registered in the name of the CDS in the company’s register. At the end of 2001, 46 percent of shares listed on the official market were on the CDS, and 25 percent of shares on the OTC market.8 For the remainder, shareholders still hold physical certificates identifying their ownership. If the shares are deposited with the CDS, that entity is responsible for share transfer. The CDS does not obtain information on ultimate owners. In addition, under Mauritius law, a company may block the transfer of shares by providing notice of its refusal within 28 days, although this practice is uncommon.9
Listed firms publish semi-annual and annual statements in at least two daily newspapers within three months of the fiscal year’s end or a given semi-annual period.10 Annual reports must be sent to every shareholder within six months after the fiscal year, and at least 14 days before the Annual General Meeting (AGM).11 Share registers may be inspected, although the ultimate owners are not disclosed.12 While the Companies Act includes a quorum requirement, in most instances the company Constitution can override it.13 Mauritius law provides that an accidental failure to notify a shareholder of a meeting does not invalidate the meeting’s proceedings.14 All shareholders have the right to elect board members, although cumulative voting is not required. Dividends are authorized by the board subject to the solvency test. Distribution of dividends is a board decision.15
Policy recommendations: As discussed in IVA, consideration should be given to ensuring that the provisions of the Companies Act that appear to require disclosure of ultimate ownership information are strictly enforced.16 Extension of the AGM notice period to 30 days is also recommended; this would provide more meaningful participation by foreign investors, who might not be able to react within the current 14-day window. Regarding quorums, it is recommended that there be at least two shareholders representing 51 percent of outstanding shares, and that the company Constitution not be allowed to override this requirement. While this is a fairly high quorum, it reflects Mauritius’ prevailing concentrated shareholding ownership structure. An introduction of cumulative voting, or permitting shareholders with a specified minimum shareholding to nominate a director, would also help minority shareholders obtain adequate representation on company boards that are dominated by one controlling interest. Finally, due to the problem of unlocking shareholder value, it is recommended that shareholders acquire the right to approve dividend distributions, even though such a policy goes further than in some OECD countries, where the board typically has total discretion regarding dividends.
Principle IB: Partially observed
Description of practice: Amendments to the governing documents require a special resolution of 75 percent of the shares represented at the shareholders’ meeting.17 Authorization of additional shares is subject only to board approval, unless the company Constitution requires a shareholder vote.18 However, before issuing new shares, the board must determine that the company and existing shareholders have been given fair and reasonable consideration for such new shares, and the issuance price is not less than par value.19 With respect to transactions resulting in the sale of the company, if more than half of the value is to be sold, a simple majority vote is required; if more than 75 percent of the company is to be sold, a 75 percent majority vote is needed.20
Policy recommendations: Since Mauritius follows the Commonwealth practice of a 75 percent supermajority for amendments, consideration should be given to increasing the free float requirement (i.e. shares not held by a controlling or strategic investor) above the existing 25 percent level. Alternatively, consideration should be given to imposing a requirement that a majority of the minority shareholders vote in favor of the resolution, in addition to the 75 percent supermajority of all shareholders. If a company is issuing new, previously unauthorized shares, then a supermajority should be required. However, if the shares to be issued have already been authorized by the shareholders, then the current practice of only requiring director consent is appropriate. With respect to transactions that result effectively in the sale of a company, all transactions resulting in a sale of half the company or more should require a supermajority. Finally, following up on the analysis in IA, both simple majority and supermajority requirements have little meaning unless changes are made to the quorum requirement mandating that a given percentage of a company’s overall voting stock is required to constitute a quorum that can vote on specific company matters, which cannot be overridden by the company Constitution.
Principle IC: Partially observed
Description of practice: As noted in IA, listed firms publish semi-annual and annual statements in at least two daily newspapers within three months of the fiscal year’s end. Annual reports must be sent to every shareholder within six months of the year-end, and within 14 days of the AGM. Every shareholder entitled to be notified of the meeting shall be sent written notice of time/place of meeting at least 14 days before the meeting. However, failure to give notice of the shareholder meeting by accidental omission does not invalidate the proceeding. Shareholder meetings may be held in a physical location or through audiovisual forms of communication, provided that all participants can hear each other throughout the meeting.21 Share registers are available for inspection, although ultimate owners are not disclosed. There is no quorum requirement for shareholder votes. Shareholders are permitted a reasonable opportunity to discuss and comment on the company’s management, and to place items on the agenda (although this rarely occurs in practice). Voting by proxy or by mail is permitted.
Policy recommendations: As discussed above, 14 days notice for the AGM may be insufficient for foreign shareholders. In addition, the rule permitting a shareholder meeting to proceed even in light of an accidental failure to give notice should be reconsidered. The lack of a quorum requirement is a significant impediment to the fulfillment of complete shareholder rights.
Principle ID: Partially observed
Description of practice: The Companies Act requires that full disclosure of the rights attached to each class of shares be disclosed to investors, and should also be included in the company Constitution.22 However, private shareholder agreements are not always made public. The situation in Mauritius is further complicated by the fact that pyramid structures are common. For example, Rogers & Co., the fifth largest Mauritius company in terms of market capitalization, is controlled (51 percent), by Rogers Consolidated Shareholdings Ltd, which is ultimately owned by two groups of individuals. Similarly, Ireland Blyth Ltd., the eighth largest Mauritius firm in terms of market capitalization, is 70 percent owned by three family investment companies, with the balance owned by the public. There are few widely held companies in Mauritius.
Policy recommendations: In order to enhance transparency, private shareholder agreements should be made public. One possible measure to enhance compliance would be to provide that shareholder agreements that are not disclosed cannot be enforced at a later date.
Principle IE: Partially observed
Description of practice: The Listing Rules and the Companies Act both include descriptions of the requirements relating to mergers and sales of substantial portions of corporate transactions. These are referred to as “substantial transactions” in the Listing Rules and “major transactions” in the Companies Act. As discussed in Section IB, major transactions require a shareholder resolution to be accomplished. There are some limited requirements in the Companies Act dealing with the market for corporate control. However, there is no comprehensive takeover regulation in place at present. Similarly, there are no specific requirements concerning anti-takeover devices, such as poison pills. Rather, there is only the general requirement to act in the best interests of the company. In addition, Section 147 of the Companies Act essentially limits the special requirements on an “interested party” to a director, whereas the Listing Rules include a broader ambit of persons.23
Policy recommendations: The Companies Act 2001’s definition of “interested party” should be made consistent with the Listing Rules. Consideration should be given to the possibility of providing specific guidance on the use of anti-takeover devices, possibly by inclusion in the forthcoming Securities Act legislation. However, the low level of liquidity prevailing on the local stock exchange precludes an active market for corporate control.
Principle IF: Not observed
Description of practice: Institutional investors are not required to consider the costs and benefits of exercising their voting rights. Disclosure of voting policies is not common practice. However, corporate investor attendance is usually high compared to that of retail investors.
Policy recommendations: Consideration should be given to requiring pension plan fiduciaries to weigh the costs and benefits of voting and disclosing their voting policies. Raising awareness of international shareholder activism may promote a shareholder activist culture in Mauritius.
Section II: The Equitable Treatment of Shareholders
Principle IIA: Partially observed
Description of practice: Unless otherwise provided for, the general rule for Mauritius companies is one share, one vote.24 However, Section 52 of the Companies Act permits classes of stock to be issued that do not conform to the one vote rule (e.g., preferred non-voting shares and multiple voting common shares), if prior approval by a simple majority of shareholders has been obtained (unless the company Constitution provides otherwise). In addition, with respect to classes of shares that have already been issued, Section 114 of the Companies Act requires that a company refrain from any action with respect to the rights attached to a class of shares unless the variation is approved by a special resolution or by consent in writing of 75 percent of the holders of that type of share. There is no requirement in Mauritius that a custodian or nominee vote in a manner agreed upon by the shares’ ultimate owners. However, the Listing Rules require that each person entitled to vote be sent a proxy form with the shareholder meeting notice, along with disclosure information that the shareholder is entitled to appoint a proxy of his own choice. If the proxy form is returned without indicating how the proxy shall vote on a matter, the proxy will exercise his discretion as to whether, and if so, how he votes.25 Voting by mail is permitted.26
Policy recommendations: The score is based on the fact that there is no requirement that a custodian or nominee vote in a manner agreed upon with the ultimate owner of the shares. It is recommended that such a requirement be put in place. All other aspects of this Principle appear to comply with relevant practices in OECD and other countries.
Principle IIB: Partially observed
Description of practice: Part VII of the 1988 Stock Exchange Act prohibits insider trading and stock market manipulation, banning any person from dealing in securities if he has information that is not generally available but would likely affect share price if it were. The Act also prohibits various types of stock market manipulation. However, there have been no cases prosecuted in five years. There appear to be no provisions expressly prohibiting abusive self-dealing; instead, as discussed in IIC, certain types of related party transactions require shareholder approval.
Policy recommendations: Enforcement of existing laws and regulations is critical. The FSC’s ability to enforce regulatory provisions concerning insider trading is limited by a lack of resources, including a staff too small to properly supervise all regulated entities, and a pay scale too low to compete for talent with the private sector. In addition, until the new Securities Act is enacted, enforcement of the Companies Act is under the remit of the Registrar of Companies. The FSC lacks direct authority over issuers, who are regulated by the SEM. Given a history of abusive self-dealing arrangements, consideration should be also be given to prohibiting certain types of abusive self-dealing.
Principle IIC: Partially observed
Description of practice: Related party transactions are of particular relevance in Mauritius; only a small number of shareholders control the largest companies, making related party transactions common. The Listing Rules define a related party transaction as (1) a transaction (other than a transaction of a revenue nature in the “normal course of business”) between a company, or any of its subsidiaries and a related party; or (2) any arrangements pursuant to which a company or any of its subsidiaries, and a related party each invests in, or provide finance to another undertaking or asset.27 With respect to such related party transactions, the issuer must consult with the Listing Committee at an “early stage,” and, if the Listing Committee so decides, it may require the issuer to make a press announcement and obtain shareholder approval of the transaction.28 Mauritius business leaders report that the Listing Rules have put pressure on the business community to limit self-dealing transactions. However, the Listing Rules merely define the parameters for self-dealing but do not prevent them. By contrast, the self-dealing prohibitions in the Companies Act appear more limited, focusing almost entirely on disclosure by directors. Under Section 156 of the Companies Act, a director must disclose to the Board the number and class of shares in which he holds relevant interests and the nature of the interest.
Policy recommendations: The Listing Rules are a major improvement, though some Mauritius business leaders question the practicality of requiring shareholder approval in cases where a majority of shareholders are likely to be “related parties,” and therefore prohibited from voting. A possible way to enhance the utility of the shareholder approval requirement would be to impose a separate rule requiring a majority of the minority shareholders to vote in favor of the proposed transaction. It may be necessary to tighten the Listing Rules requirements with respect to related party transactions. In particular, a bright line test would enhance transparency and understanding of the requirements. It is also recommended that discretion over related party transactions be given to an audit committee of the board composed of a majority of independent directors.
Section III: The Role of Stakeholders in Corporate Governance
Principle IIIA: Partially observed
Description of practice: The Companies Act provides that a director’s duties are owed to the company, rather than to shareholders.29 Mauritius corporations must also comply with two comprehensive schemes regulating employment: the Industrial Relations Act 1973, which contains provisions on the right to strike; and the Labor Act 1975, which governs working hours, holidays, health and safety rules. Legal minimum wage rates are fixed periodically for specific industries according to National Remuneration Orders. The Mauritius Constitution guarantees that there shall be no discrimination based on race, place of origin, political opinion, color, creed or gender. In January 2001, the Joint Economic Council published a code of conduct by which Mauritius companies should operate. In part, the company must comply with all occupational health and safety laws, achieve equal opportunity and treatment for all employees, respect employee’s dignity and individuality, and ensure employee record confidentiality.30
Policy recommendations: A higher score in this area may be warranted once there is demonstrated progress in ensuring the enforcement of existing labor rights.
Principle IIIB: Partially observed
Description of practice: As discussed above, there continue to be concerns about the ability of employees to obtain redress of their rights. The situation with respect to creditor rights is in flux, owing to the fact that the new Companies Act 2001 does not touch on insolvencies, which will be covered under future legislation. Pending the introduction of the new legislation, the Companies Act 1984 still governs in the area of creditor rights. However, overall, business leaders did not report that creditor rights were a particularly problematic issue in Mauritius.
It should also be noted that as part of the British Commonwealth, final appeal of a court decision in Mauritius could be made to the Privy Council in London.
Policy recommendations: Prompt passage of a new insolvency act would provide more certainty in the resolution of creditor disputes. Consideration should be given to undertaking a ROSC assessment in the area of creditor rights and insolvency.
Principle IIIC: Materially not observed
Description of practice: The use of employee incentive stock option schemes is not widespread. In part, this reflects the lack of liquidity of the local stock exchange, coupled with the high effective tax rates imposed on stock options.
Policy recommendation: Consideration should be given to promoting stock options as a means of better aligning management and shareholder interests, while taking into account the international debate to ensure that some of the abuses occurring elsewhere with respect to stock options do not occur in Mauritius. Share participation plans by employees, where the company - with possible governmental tax incentives - discounts share purchases, should also be considered (a).
Principle IIID: Largely observed
Description of practice: Ultimate ownership information is not necessarily available to all stakeholders (including shareholders). In addition, non-shareholder stakeholders do not have access to certain information, including the minutes of meetings and resolutions of shareholders, copies of written communications to shareholders, and the interests register of the company, which details certain interests in the company by the directors.31 However, all stakeholders have access to certain other corporate information, including the certificate of incorporation, the company constitution, the share register, and directors’ full names and home addresses.32
Policy recommendations: It would be helpful to regularly publicize the interests register, particularly information concerning purchases and sales of stock by directors and key executives.
Section IV: Disclosure and Transparency
Principle IVA: Partially observed
Description of practice: The level of disclosure in Mauritius has increased under the Companies Act 2001, which requires adherence to IAS.33 Every company’s directors must ensure that financial statements be completed within six months of the fiscal year’s end.34 Generally, the financial statements must present fairly the financial position, performance and, for companies above a certain size, the company’s cash flow statement.35 The financial statements must include a balance sheet and a profit and loss statement, along with notes or documents giving information relating to the balance sheet and a statement of accounting policies.36 Except for smaller companies, financial statements must also include a statement of changes in equity between the last two balance sheet dates.37 In addition, when a company has one or more subsidiaries, it must present its financial statements on a consolidated basis.38 The financial statements must be submitted to the Registrar for registration within 28 days of being certified by the company’s directors.39 Concerning major share ownership, the Companies Act requires each company to maintain a register of “substantial shareholders” (those with five percent or more of the voting rights in aggregate).40 The Listing Rules also require this information to be provided to the SEM.41 As discussed previously, it is unclear whether there is strict enforcement of actual disclosure of ultimate ownership information at the five percent level. However, there is no requirement under either provision that information on ultimate ownership be maintained below this level. The law requires that aggregate remuneration of executive directors and non-executive directors be disclosed in the annual report.42
Mauritius requirements are less precise with respect to non-financial disclosure. For example, company objectives need not be disclosed on an ongoing basis (Section 9.31 of the Listing Rules does require this at the time of initial listing), although the Companies Act requires annual reports to disclose all material information to give shareholders an “appreciation” of the company’s affairs. There is also no disclosure requirement for material foreseeable risk factors, material issues regarding employees and stakeholders, or governance structures and policies.
Policy recommendations: Disclosure requirements under the Companies Act 2001 and the Listing Rules should be more aligned by amending the Listing Rules to require the use of IAS by publicly traded companies. Both the Companies Act and the Listing Rules should also make clear that, at least once the five percent ultimate ownership threshold is reached, such information should include the ultimate owner (the wording of the current provisions is unclear and confusing, since it references the Companies Act 1984 . More disclosures are needed for directors and executives, in line with recent developments in the international arena. Consideration should be given to requiring disclosure on an individual basis of director and executive remuneration and other benefits (such as loans), following trends in other countries. Details of contract termination compensation arrangements should be disclosed. Moreover, current disclosure requirements focus on financial information, while non-financial disclosure is left to the company’s discretion. Greater attention should be paid to non-financial disclosure, including company objectives, material foreseeable risk factors, and governance structures and policies. As a Code of Best Practice for corporate governance is developed, this is an area where companies could enhance their own practices, even if no statutory requirements are made in the near future.
Principle IVB: Largely observed
Description of practice: As noted in IVA, financial statements must adhere to IAS for accounting periods starting after December 2001.43
Principle IVC: Partially observed
Description of practice: Companies must appoint external auditors to audit their financial statements.44 Audits must be conducted in accordance with the International Standards on Auditing (ISA).45 Persons appointed as auditors must be a Member of the Institute of Chartered Accountants in England, Wales, Scotland, Ireland or the Association of Chartered Certified Accountants and the Chartered Accountants of India.46 Only the Minister may certify persons who have qualifications “equivalent” to such auditors. There is no statutory definition of independence, although company directors, employees, related persons, and non-residents of Mauritius are excluded from performing as auditors.47 While statutory provisions appear to conform to international standards, in practice, the performance of the auditing profession in Mauritius has been uneven. Government and business leaders generally consider that the auditing profession requires an oversight body to ensure proper monitoring and disciplining.
Policy recommendations: Oversight and monitoring of auditors is a critical issue. The profession is unregulated, and unethical behavior or negligence by auditors is rarely punished. It is recommended that further work in this area be coordinated with the ongoing accounting and auditing ROSC to establish the state of these professions and assist in the development of an action plan to monitor and regulate the professions. The ROSC should also review the issue of statutory auditor rotation, which is one tool that could be used to enhance the independence of the auditing profession from their clients. Finally, while non-audit fees must be disclosed, disclosure requirements may need to be revisited for enhanced transparency.
Principle IVD: Largely observed
Description of practice: Mauritius companies must send their annual report to shareholders at least 14 days before the AGM.48 Financial statements must also be filed with the Registrar for registration within 28 days after company directors sign the financial statements; such information is publicly accessible.49 In addition, the Listing Rules require that issuers keep the SEM, shareholders and other securities holders informed “as soon [as] reasonably practicable” of material information.50 An Investor Relations Manager has to be appointed in all listed companies. A Shareholders’ Charter is under preparation is expected to address these issues.
Policy recommendations: The date of the AGM and date by which the annual report is sent should be aligned. A more precise definition for timeliness as regards disclosure of material information – other than “as soon as reasonably practicable” – should be considered.
Section V: The Responsibilities of The Board
Principle VA: Partially observed
Description of practice: As discussed in IIIA, directors owe their duties to the company.51 These duties include exercising their powers in good faith and in the company’s best interests, as well as with the degree of care, diligence and skill of a reasonably prudent person under similar circumstances. When a director holds executive office, the director is held to the higher standard of care that a competent executive in such a position would normally exercise. Directors must exercise their powers according to all other Companies Act provisions, as well as the company Constitution. Directors must obtain required shareholder authorization, not enter into obligations on behalf of the company unless the company can reasonably meet its obligation, not disclose confidential information, not compete with the company, and not illegally use company assets.
Notwithstanding these comprehensive requirements, which were enhanced under the Companies Act 2001 in order to place a higher duty of care on directors, in practice, the performance of company directors is uneven. Many corporate directors appear knowledgeable in their duties and in their company’s business ventures, sincere in their dedication to fulfilling their obligations, and willing to take an active role in company oversight where necessary. However, in other cases, board members are appointed based on their friendship with the majority shareholder, rather than their skills and experience. As a result, they have been unwilling or unable to ensure effective oversight of the company. Moreover, there are numerous cases involving the largest companies where directors have failed to play a key role in helping ensure the unlocking of shareholder value in order to benefit non-controlling shareholders.
Policy recommendations: The establishment of a Mauritius Institute of Directors (IOD), perhaps as part of a regional consortium, could play a key role in training directors. In addition, consideration should be given to capping the number of directorships that a single individual may hold. This would reduce potential conflicts of interest while ensuring that directors spend due care and time on company affairs. Finally, the anticipated voluntary code of corporate governance may provide additional guidance to directors regarding their duties and obligations. Consideration should be given to extending these responsibilities to parastatal organizations.
Principle VB: Partially observed
Description of practice: It is difficult to gauge whether directors always act in all shareholders’ best interests when majority shareholders control the board. Different shareholders’ interests often conflict, and it may be hard for directors to reconcile them. The Listing Rules provide that for companies with a controlling shareholder, the SEM may require appointment of a “sufficient” number of independent directors to ensure that the company acts in all shareholders’ interests.52
Policy recommendations: Identifying potential directors who are independent of management and major shareholders may be difficult; boards may need to include non-residents. Regulators should ensure compliance with Listing Rule requirements for independent directors in cases where there is a controlling shareholder.
Principle VC: Partially observed
Description of practice: The Companies Act contains an oppression remedy whereby shareholders or former shareholders can petition a court to require the company or other persons to acquire the shareholder’s shares or to pay compensation to a person, and regulate the future conduct of the company.53 In addition, a current or former shareholder may bring an action against a director for breach of a duty to him/her as a shareholder.54 However, the duties owed by a director to a shareholder are narrow, and do not include the duties in Section VA, which are owed to the company. Rather, duties owed by directors to shareholders are limited to issues like the duty to supervise the share register, disclosure of an interest in a transaction or in company shares.55 Finally, the Companies Act permits shareholders to bring a derivative action against a director (on behalf of the company); in such cases, damages are paid to the corporation.56
Policy recommendations: The legal provisions of Mauritius are in line with other Commonwealth jurisdictions, and the oppression remedy is a particularly strong tool that can be used by shareholders to fight abuse of their rights. In certain cases, the oppression remedy and other provisions of the Companies Act were not brought to bear to sanction directors who had engaged in misconduct. Consideration should therefore be given to how such remedies could be better utilized in cases of abuse.
Principle VD: Partially observed
Description of practice: As discussed in VA, the roles and duties of the directors are defined in generic terms in the Companies Act 2001. Section 143 of the Act requires that directors exercise their powers in accordance with the Act and within limits imposed by the company Constitution. They must exercise their powers in good faith in the company’s best interests, while exercising a reasonable degree of care, diligence and skill. In addition, a listed company executive must apply “a degree of care…which a reasonably prudent and competent executive would exercise.” It is unclear how much directors focus on their responsibilities regarding the review and guidance of corporate strategy and major plans of action, the selection and supervision of key executives and oversight of remuneration, monitoring of potential conflicts of interests and ensuring the integrity of a corporation’s accounting and financial reporting systems. They do not appear to focus on monitoring the effectiveness of governance practices or disclosure and communications processes, which are not covered by statutory obligation under the law.
Policy recommendations: In addition to the general duties of directors specified in Section 143 of the Companies Act 2001 and elsewhere, it may be helpful to define directors’ specific duties in various areas, including corporate strategy, oversight of key executives, executive and board remuneration, governance practices and the process of disclosure and communication. It would also be useful to ensure that each board include audit, nomination and remuneration committees. This framework could be developed with the private sector, possibly through the pending voluntary code of corporate governance. Since qualification of board members is an issue, there should be some minimum and relevant qualifications required. The proposed implementation of an Institute of Directors should address the need for sustained training of board members.
Principle VE: Materially not observed
Description of practice: majority shareholders usually appoint non-executive board members, so there are few truly independent directors. The Companies Act 2001 requires that directors attend meetings regularly, but attendance need not be disclosed.57 Key board members – typically key managers, major shareholders or both - participate in decision-making.
Policy recommendations: As noted in VB, the Listing Rules provide discretion to the SEM to require a sufficient number of directors who are independent of the controlling shareholder. However, this rule could be better enforced. Directors (including non-executive) should have unrestricted access to all information pertaining to the company and its subsidiaries to enable them to fulfill their obligations. Finally, shareholders should be able to gauge the involvement of the directors; it would be advisable for board member attendance to be reported at the AGM.
Principle VF: Partially observed
Description of practice: Quality and timeliness of board information varies among companies. Board meetings are often perfunctory with some directors dominating.
Policy recommendations: Training is vital so that directors understand their duty to obtain reliable and accurate information upon which they can make informed decisions.