Proposed corporate governance code for consultation

PNGX is proposing to introduce a new Corporate Governance Code for the guidance of boards of listed issuers.

The proposed Code contains 17 standards. Within each of the 17 standards are a number of recommendations.

Each PNGX listed company is required under the Listing Rules to have corporate governance policies, which are appropriate having regard to the nature and scale of its operations. Each company should address each recommendation set out in the standards.

It is also required to include in its annual report a corporate governance statement or the URL of the page on its website where a corporate governance statement is located.

“While the proposed Code has been developed by reference to global standards and practices adopted in other markets, it has been adapted to have regard to the characteristics of the PNG market and to be fit for purpose for the country,” said PNGX chairman, David Lawrence.

“The standards and recommendations are not prescriptive. Each company is at liberty to either adopt the standards and recommendations or not.

“However, as they are standards of expectations established through a mechanism of industry and stakeholder consultation, it is expected that directors should disclose in the company’s annual report the extent to which the company has adhered to the standards and recommendations, and where there has been no or partial adoption, to give reasons.

“This ‘if not, why not’ approach is common in markets globally.

“Whilst the scope of the Code is limited to listed companies, it is hoped that the governance standards become a benchmark for corporate governance by the private sector in PNG generally. They may also have relevance to governance of SOEs.”

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