I write further to the article on Page 6 of the Sunday Business Times of 3 July 2011, ”Finally, perera duo take Hayleys board control.” As is quite rightly stated by one analyst “(t)he interesting question now being asked is how independent can the (new) independent directors be when they are directors in Dhammika Perera’s other companies(?)” Two of the three new so-called independent directors clearly fall in this category.
Why did the three earlier independent directors not seek re-election? According to press reports a party from the Dhammika Perera faction had threatened not to vote for them. The whole purpose of independent directors is that they are independent of the controlling interest and management and should primarily represent the views of the independent minority shareholders. They should not be browbeaten or bullied into following the dictates of one particular faction. The importance of the independence of the independent directors as well as the criteria and rationale for their election has been well described in the article “Some Aspects of Corporate Governance of PLCs” by Mr. K.C. Vignarajah appearing in the Business Times of Sunday 26 June 2011.
The Chairman/CEO of Hayleys has the voting rights of the D.S.Jayasundera Trust, the employees Share Trust and various associate companies of the Group, which together hold about 30% of the Hayleys voting rights at present. He has a bounden duty to act in the interests of the beneficiaries of the Trusts and the employees. This entails not only financial performance, but also preserving the high standards of professional conduct, so well established and maintained by the late Mr. Lal Jayasundera. It is ironic that the only representative of the Jayasundera family on the Board who was also the most senior independent non-executive director with considerable professional experience has been bullied into resigning. It would be interesting to know the reasons for his resignation and that of the other two independent non-executive directors.
5A, Cambridge Terrace,