Independent directors, auditors must for good governance - Securities Commission, NZ

by Lalin FERNANDOPULLE

Independent directors and auditors are essential for good corporate governance said Chairman, Securities Commission New Zealand and Executive Committee, IOSCO, Jane Diplock.

She was speaking at a seminar on "Corporate governance:An effective tool for rebuilding the financial world" organised by the Financial Services Academy of the Securities Exchange Commission of Sri Lanka.

Diplock said the absence of independent directors and auditors will adversely affect good governance and the progress of a company.

Good corporate governance is a vital concept in the corporate world which seeks to enhance its performance and speed up decision making. Lack of good governance has caused major problems to corporates worldover.

Diplock said 84 percent of 200 global institutional investors are willing to pay premiums for shares in a well-governed company and added that 11 percent of US assets are tied up in socially responsible investment.

Environment and social governance are integral to good governance. Investors across the world are increasingly becoming environment conscious and would avoid investing on projects that are harmful to nature.Good corporate governance helps achieve corporate success. Absence of good governance leads to loss of investor confidence in securities markets.