Corporate governance regulations to be instituted in April: Ministry

By Nyein Nyein

The Myanmar government will publish a corporate governance regulations for listed enterprises in April, said U Aung Naing Oo, Permanent sScretary of the Ministry of Investment and Foreign Economic Relations.
The Advisory Committee for Corporate Governance Reform in Myanmar endorsed the draft notification for corporate governance on 5 February at the Pan Pacific Hotel.
“We will refer two laws — the Securities Exchange Law 2013 and the Myanmar Companies Law 2017 — after the draft is finalized and legalized. We intend to publish the corporate governance notification in April, 2020,” said U Aung Naing Oo.
The draft corporate governance regulations will cover four key areas — internal control system, audit committee, independent directors, and disclosure, he said.
The Directorate of Investment and Company Administration will monitor the internal control system of listed companies. To oversee the effectiveness of the internal control system and ensure it functions properly, listed companies will be required to set up an audit committee. Furthermore, all listed companies would need to have at least one independent director.

Permanent Secretary U Aung Naing Oo delivers the speech at the meeting of Advisory Committee for Corporate Governance Reform at the Pan Pacific Hotel in Yangon. Photo: Supplied
Permanent Secretary U Aung Naing Oo delivers the speech at the meeting of Advisory Committee for Corporate Governance Reform at the Pan Pacific Hotel in Yangon. Photo: Supplied

“The audit committee will have to be chaired by an independent director. Investors will need to know how the corporate governance is structured and how the company manages conflict of interest. Transparency is central to shareholders’ ability to exercise their rights. The independent director would have to disclose important information to investors. Those items will be embodied in the corporate governance notification,” said U Aung Naing
Oo. “The corporate governance system will help listed companies and public companies to regulate their management to ensure compliance with the best governance practices and to have transparency and responsibility. Once the regulation is instituted, all companies will have to comply with it,” according to the Advisory Committee on Corporate Governance Reform. The corporate governance regulatios has been drafted based on the Securities Exchange Law and Myanmar Companies Law.
“Some items will be effective from October, 2020. Some items will be reported to the DICA and will come into effect in October, 2021,” said U Aung Naing Oo.
“With this notification, Myanmar’s capital markets will boost investor confidence and increase economic efficiencies. We will continue to strive to improve corporate governance and contribute to the further development of capital markets in the country,” he said.
Myanmar drafted the corporate governance regulations in cooperation with the Organization for Economic Co-operation and Development (OECD) in 2013. The Advisory Committee for Corporate Governance Reform was formed in 2018 and started working from January, 2019. (Translated by EMM)

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