1. EXECUTIVE SUMMARY
Executive Summary [1/14]
In view of improving the overall governance in Mauritius, the NCCG has as its main aim to identify the key weaknesses and discrepancies in the governance of companies in Mauritius. In this regard, BDO De Chazal Du Mée and DCDM Marketing Research have been commissioned to conduct a survey on the state of compliance with the Code of Corporate Governance in Mauritius. The research was conducted between August and October this year and comprised of: Desk research to gather factual information on the extent of compliance with the Code Qualitative research among major stakeholders to have their views and insights on the extent of compliance of companies with the Code Quantitative research among a sample of 318 companies to survey the extent of application of the Code, its effects on the organisational and operational efficiency of the Boars and problems encountered by companies in implementing the Code Benchmarking exercise with international best practices and research conducted abroad to identify gaps between the Mauritian Code and its application with International Best Practices The key findings of the survey are presented thereafter. Compliance with the Code of Corporate Governance Survey indicates that compliance with the Code of Corporate Governance is still not the norm in Mauritius, in that only 30% of the companies state that they currently comply with the Code, 29% do not comply. A certain note of indifference for the matter was observed among companies, as denoted by the level of non-response to the survey [41%] Higher compliance with the Code is noted among Listed companies [including Banks and Non-Banking Financial Institutions] [83%] and State Owned Enterprises [44%], rather than among DEM Listed companies [36%] and non-listed companies [9%]
Executive Summary [2/14]
An analysis of the Annual Reports of 86 companies for which the Annual Reports could be collected shows An improvement in the proportion of the Companies presenting a Corporate Governance Report in their Annual Report over the last 3 years, from 74% in 2006 to 85% in 2008. However, they seem less likely to disclose such information as the Directors’ emoluments, and welldefined and detailed Risk Management and Internal Controls An increase in the proportion of companies setting up Board Committees to address Corporate Governance, Audit, Risk, and Nomination Issues. The structure of the Board of Directors is not well balanced in that nearly half of the responding companies have less than 2 Executive Directors as required by the Code, and lacks diversity, be it in terms of age, gender, qualifications or ethnic origin Appointment of Directors While the Code provides that Board of Directors should be composed of at least 2 Executive Directors and at least 2 Non-Executive Directors, survey shows that on average Boards in Mauritius are constituted of an average of 1.8 Executive Directors, and 6.8 Non-Executive / Independent Directors On average, 3 Directors are seen to represent Financial Institutions / banks / Large Shareholders while 1 Director represents Minority Shareholders Only 42% of the companies responding to the survey assert that they do have a mechanism for rotating Board Members. In general, 55% of the companies responding to the survey claim that Board Members are rotated every 1-2 years within their company, as compared with 39%, where rotation takes place every 3 years Contestation by Minority Shareholders of election of a Director’s on the Board seems to be very rare in companies responding to the survey, with only 2% mentioning such an event
Executive Summary [3/14]
Interestingly, the post of Chairman and CEO is seen to be held by different individuals in the majority of the companies [84%]. However, the role of each, does not seem to be properly understood. It also...