The Bhutanese Leading the way.
With an objective to maximize economic value and financial performance of Druk Holdings and Investments (DHI) companies, a corporate governance (CG) code was launched earlier this week, on Tuesday.
The code, based on globally accepted standards, consists of a set of guidelines on corporate governance practices and principles, including the board charter, audit committee charter and code of conduct for the directors and senior managers, among others.Finance Minister Namgay Dorji who launched the new CG code also released the revised ownership policy.The two documents were developed as part of DHI’s initiatives to strengthen corporate governance in DHI and its companies, in addition to other systems and procedures, that have been introduced to improve the performance of companies.
The ownership policy is the overall policy framework for the administration of companies under DHI and the CG code includes a set of rules that define the relationship and roles between the shareholders, management and board directors to promote transparency and accountability in the operation of companies.
DHI’s CG code has been developed based on the OECD CG Principles which are considered the international benchmark on corporate governance.
Chairman of DHI, Lyonpo Om Pradhan said, “In terms of promoting transparency, DHI has developed the ownership policy to promote transparency that clearly outlines the interface between DHI and its companies, and provides a framework within which companies can operate. The policy has been revised this year based on our experience over the last five years.DHI has ensured that all its companies develop manuals and systems such as Performance Management System and Human Resource and Procurement manuals.”
“Recruitment has been one of the most controversial areas. We have now introduced transparent and merit based recruitment process for CEOs and other employees. For CEOs, we have developed CEO selection guidelines and set up Board Level Nomination Committees. This year we appointed 4 CEOs (NRDCL, BoB, DHI Infra,and DHI Hospitality). I am happy to report that unlike in the past there were no negative comments or complaints from individuals or the general public,” he said
In terms of ensuring accountability, the chairman said DHI has established accountability through performance measurement and performance-linked remuneration. The companies’ annual compact targets are assessed and bonuses are paid based on performance. DHI expects all its companies to strive for excellence in corporate governance and meet the standards prescribed in the CG.
However, DHI also recognizes that as its companies vary by their levels of maturity and size, not all companies would be able to strictly comply with some of the international standards prescribed within the code. For this, the code provides the flexibility under the ‘comply or explain’ principle, whereby, the companies could provide valid reasoning for lack of adherence to the code.
