PNGX Launches Enhanced Governance Code for Firms
PNGX, Papua New Guinea's national stock exchange, has adopted a fresh Corporate Governance Code for Listed Issuers after extensive public consultation.
The comprehensive Corporate Governance Code, recently adopted by PNGX, is set to elevate corporate governance standards in the country while guiding listed issuers' boards.
The Code will take effect from July 3, 2023, in conjunction with the implementation of the new Listing Rules. It mandates listed companies to report their corporate governance practices for the financial year ending December 31, 2023, with these reports expected to be included in the second quarter of 2024's annual reports.
Comprising 17 Standards, each containing a set of Recommendations, the Code results from meticulous tailoring to meet the specific needs of the PNG market while aligning with international best practices.
Although compliance with the Code is not obligatory, PNGX-listed companies are encouraged to establish suitable corporate governance policies tailored to their operations. Additionally, companies must address each Recommendation outlined in the Standards and include a corporate governance statement or its URL in their annual reports, as per the Listing Rules.
The Code, developed in collaboration with contributing partners, the International Finance Corporation (IFC), and the UN Sustainable Stock Exchanges Initiative, draws on global standards and practices while considering the unique characteristics of the PNG market.
It promotes flexibility, allowing companies to adopt or adapt the Standards and Recommendations as necessary. However, directors are expected to disclose the extent to which their company adheres to the Code in their annual reports, and if nonadoption or partial adoption occurs, they should provide reasons following the widely recognised "if not, why not" approach.
Although the Code initially applies to listed companies, its governance standards are poised to become a benchmark across the private sector in Papua New Guinea. They may hold relevance for State-Owned Enterprises (SOEs).
The development of the draft Code was made possible through collaboration with partners such as the IFC and the Pacific Private Sector Development Initiative (PSDI), supported by the Governments of Australia and New Zealand. The PSDI, as an Asian Development Bank (ADB) program, actively works toward enhancing private sector development in the Pacific region.
David Lawrence, Chairman of PNGX, emphasised the importance of addressing sustainability factors such as corporate governance, transparency, climate change, and environmental sustainability to enhance PNG's international reputation and attract local and foreign investment.
Elizabeth Wamsa, General Manager of PNGX, highlighted that the Code includes Recommendations to foster a broader pool of directors, particularly female directors, while emphasising disclosures related to gender pay equality policies, 'return to work' practices, and policies addressing gender-based violence. In these areas, the new Code sets a global standard.
Markus Scheuermaier, IFC's Resident Representative in Papua New Guinea, acknowledged that good corporate governance practices enhance company performance and are vital for sustainable private sector development.
He expressed pride in supporting PNGX in this groundbreaking initiative, particularly the inclusion of standards addressing workplace responses to gender-based violence and childcare, which demonstrate innovation and alignment with international best practices.
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Source: PNGX
