Times They Have Met: Mauritius’ Commitment to Corporate Governance
Port Louis, Mauritius - As part of its efforts to uphold high standards of corporate governance across the African continent, Mauritius has introduced a new National Code of Corporate Governance 2016. This code aims to guide boards of directors in complying with governance practices and minimizing risks within companies.
Principles and Guidance
The code provides for eight principles and guidance that can be uniformly applied by all organizations concerned. Unlike the previous code’s “check box” approach, this methodology allows for more flexibility and enables corporations to adapt each principle to their business model and internal structure.
Code of Ethics and Code of Banking Practice
The Code of Ethics and Code of Banking Practice, issued by the Mauritius Bankers Association (MBA), also aims to promote transparency and good banking practices. The codes include a statement of adherence by all members of the MBA to the underlying principles relating to corporate governance in line with the Code of Corporate Governance for Mauritius and the BoM Guidelines.
Fit and Proper Person Test
The Banking Act 2004 sets out the requirements applicable to the appointment and supervision of directors and senior officers of banks. The fit and proper person test is a crucial aspect of this process, which ensures that only competent, honest, and financially sound individuals are appointed to these positions.
Criteria for Assessment
The Bank of Mauritius (BoM) has issued a Guideline detailing the fit and proper criteria for assessing the fitness and probity of directors, senior officers, and shareholders holding a significant interest. The guideline includes a questionnaire that must be completed by any applicant and submitted to the BoM for assessment prior to obtaining approval.
- Key criteria:
- Competence and capability
- Honesty
- Integrity
- Diligence
- Fairness
- Reputation
- Good character
- Financial soundness
Registration and Oversight of Senior Management
Senior officers of banks, including the CEO, deputy CEO, chief operating officer, chief financial officer, secretary, treasurer, chief internal auditor, managers of a significant business unit, or person with similar position and responsibility, are subject to registration and oversight by the BoM.
Responsibility of the Board
The board of directors has a responsibility to establish a fit and proper person policy and implementation processes in line with the Guideline. The board must apply the policy to directors, senior officers, and shareholders that are in a position to exercise significant influence on the institution. Nominations for election to the board or senior officer positions must also meet the test of fit and proper person set out in the Guideline.
Conclusion
In conclusion, Mauritius’ commitment to corporate governance is evident through the introduction of the new National Code of Corporate Governance 2016 and the guidelines issued by the Bank of Mauritius. These measures aim to promote transparency, accountability, and good governance practices within the banking sector, ensuring the stability and prosperity of the economy.