The move by the Capital Markets Authority to list and shame listed firms that breach boardroom rules and corporate governance standards is a step in the right direction.
According to the markets regulator CMA, the new measure will take effect from next year.
We welcome the step and aver that it is long overdue in a sector that has seen some companies ignore their shareholders at will.
It is our hope that the exposure of rogue firms will help instil discipline in the industry.
According to the CMA, the list of shame of firms that fail to meet regulatory standards will be anchored on stringent governance rules that demand disclosure of directors’ pay, their term limits, adoption of a code of ethics and review of board composition.
The standards also set rules on stakeholder relations, ethical and social responsibility, transparency and risk control as well as management of conflict of interest.
it is hoped that once listed companies are compliant their shareholders will be able to reap from their portfolios.
Though the planned measures will deservedly be welcomed by shareholders, one must also wonder why it took so long to rein in errant firms.
By failing to name and shame firms that violated rules, company officials operated recklessly since they knew that they could do as they wished under the veil of anonymity.
The markets regulator did not disclose the names of the companies and only referred to them by their core business or sector grouping.
According to the CMA report that covered the year ended June 2018, 27 firms or 44 percent of listed firms were in breach of diverse corporate governance requirements such as transparency.
Ten of the companies failed to submit their annual reports and an internal review of their corporate governance processes.
Another 17 firms were termed as needing improvement after scoring poorly on the set yardsticks.
We urge the regulator to go beyond naming and shaming rogue companies that continue violating set rules by meting out tough punishment of the directors. That’s the least the shareholders deserve.