Every year there is a popular annual reports competition and many companies scramble together their numbers, publishing glossy reports, to woo judges. I wonder whether we are going in the right direction here with global focus on the planet and preserving its fast-dwindling resources for generations to come.
Dear Editor, the world is moving towards sustainability and there is a lot of talk about triple bottom line i.e. Planet (environment), People and Profit. What actually happens through these kind of competitions is that we indirectly encourage the companies to come up with a nice Annual Report - wasting scarce resources such as paper, ink, management time, etc while production costs are also very high to a company. All this money could be channeled to real CSR and helping the community. Furthermore companies are also moving to an era of producing reports on CD for the benefit of their stakeholders which then eliminates the need for using up the earth’s valuable resources.
I firmly believe competitions like this contribute to eating into scarce natural resources, and should be avoided as far as possible which in itself becomes a CSR project.
By all means awards can be presented for the best disclosure, transparency, etc through other ways than a expensive, glossy, natural resources-eating report. These are my thoughts as a responsible citizen and I would like to hear any thoughts on this issue.
A Colombo professional
Enforcing the 70-year-old rule is good for banks
This has reference to your very bold editorial in the Business Times last week highlighting the need for the regulator to enforce rules of good corporate governance that is now become law within the banking system. However honest, educated and capable a person may be, advancing age retards brain/attention power and familiarity bred through long stints as directors/ chairmen’s work against the ability of a director to play the required objective role, and to this end the maximum term of nine years and the age limit of 70 years for directors imposed by the code is very welcome.
There would obviously be unhappiness from many of the incumbent directors of some of the banks stating that age and length of office should not be criteria, but since in most boards there is reluctance for proper succession planning at board level, it is a good move to have a mandatory mechanism to progressively infuse new blood rather than risk running boardrooms as clubs of those one is comfortable with. This also strengthens the important aspect of governance, which is the need for diversity of opinion and the need for gender equality. Practicing good governance in a bank generally gives a bank the protection to operate effectively and do what’s right for the employees, depositors and for the shareholders. Banks occupy a special position of trust in the economy.
They have broader responsibilities that go beyond their shareholders and employees by virtue of the economic role they play. Therefore, it is important for the regulator to ensure that people who have been in positions for years enjoying expensive privileges and who are attempting to hang in there to extend their privileges for a few more years be shown the door. Good corporate governance also require that boards do not get in directors with conflicts of interest of any form into their boardrooms This would prevent any dominance/interference by groups sitting together in other boardrooms working together to support their facility papers. Furthermore, rules of good corporate governance is today a prerequisite to get top foreign funds to invest in the Colombo Stock Exchange. Therefore, the Central Bank’s resolve to enforce the rules of good corporate governance is commendable and most welcome at this juncture.