Corporate Governance

Chairman’s statement

I am pleased to introduce the Bank’s Corporate Governance Report on behalf of our Board. The Corporate Governance Report provides an insight into how the Board operated and the key issues considered during the year.

The Board sets the example for employees of the Bank by implementing the highest standards of business ethics and corporate governance.

As I said last year, high standards of corporate governance continue to be a key priority for the Board.

Corporate governance practices of the Bank are

in accordance with the Board approved Corporate Governance Charter of the Bank.

The Bank’s corporate governance framework is well-structured and is supported by a strong focus on integrity, transparency, and clear and timely communication.

We continually review the framework within which we operate and the processes implemented to ensure that they reflect the complexities of our business and meet the needs of our stakeholders.

I confirm to the best of my knowledge that there were no material violations of any of the provisions of the Directions of the Central Bank of Sri Lanka, other applicable laws and regulations, Codes of Conduct and other related policies and procedures of the Bank.

C R Jansz

18 February 2019

Governance framework of the Bank

Good corporate governance is a mechanism that harmonises the interests of a wide range of stakeholders of an institution, while contributing to sustainable growth by attracting outside sources of capital. The Bank practices high standards of corporate governance based on the OECD principles of good governance.

OECD principles of good governance are based on the following six guidelines:

  • Promoting transparency, being consistent with laws, and clearly articulating division of responsibilities
  • Protecting and facilitating the exercise of shareholder rights and ensuring equitable treatment of all shareholders
  • Exercising due diligence and responsibility in capital market operations
  • Recognising the rights of stakeholders and encouraging cooperation between stakeholders in creating wealth and sustainability
  • Timely and accurate disclosure on all material matters regarding the Bank including financial situation, performance, ownership, and governance
  • Ensuring the strategic guidance of the Bank, effective monitoring of management of the Board, and the Board’s accountability to the Bank and its shareholders

DFCC Bank’s goals of good corporate governance

Conduct and ethical framework

The Code of Conduct for Directors adopted by the Bank which the Directors are expected to abide by, encompasses the following:

  • Compliance with laws, rules and regulations
  • Avoidance of conflicts of interest
  • Maintenance of confidentiality of information
  • Fair dealing with stakeholders
  • Protection of the Bank’s assets

Employee behaviour is governed by a separate Code of Conduct including other policies and procedures such as the Disciplinary Code, Statement Prohibiting Insider Trading, Whistleblowing Policy, Anti-Money Laundering Policy, Compliance Policy, Disclosure Policy etc.

Permanent Board Committees as at 31 December 2018


Attendance of Directors at meetings
Name of Director Main Board Audit Committee Human Resources and Remuneration Committee Nomination and Governance Committee Integrated Risk Management Committee Credit Approval Committee Related Party Transactions Review Committee
Total Number of meetings 14 12 7 9 4 13 18
K P Cooray 11/14 7/7 7/9 12/13 15/18
T Dharmarajah 13/14 10/12 4/4 16/18
J Durairatnam 6/6 4/4
Ms L K A H Fernando 13/14 12/12 4/4
P M B Fernando 14/14 12/12 9/9 13/13 14 /15
C R Jansz 14/14 7/7 9/9 13/13 17/18
N K G K Nemmawatta 8/9
Ms V J Senaratne 12/14 4/4
L H A L Silva 14/14 4/4 16/18
Ms S R Thambiayah 14/14 5/7

Attended/Eligible to attend

Shareholder rights

The basic rights of shareholders include – (a) the ability to transfer shares freely, (b) to have access to financial and other relevant information about the entity on a regular and timely basis, (c) the ability to effectively participate in shareholder meetings, (d) appoint Directors and Auditors, and (e) equitable treatment relating to the type of shares owned.

The shares of the Bank are freely transferable through the Colombo Stock Exchange but subject to limitations stated in the Articles of Association of the Bank and the Banking Act.

The Board approved Corporate Communications Policy ensures that information relating to the financial performance and the progress of the Bank is made available to shareholders through timely disclosures made to the Colombo Stock Exchange (CSE). The Annual Report contains a comprehensive review of performance as well as other information of relevance to the other stakeholders apart from reporting on the financial condition of the Bank and the Group. All important information is given publicity through the press and electronic media and posted on the Bank’s website.

The Bank has procedures to promptly disseminate price sensitive information and trading in shares by the Directors to the CSE as required by the Listing Rules. In instances where this is not possible, the Chief Financial Officer advises closed periods for trading in the Bank’s shares by employees and Directors. The Board has formally adopted a Statement of Policy Prohibiting Insider Trading. As a general rule, the period after the end of each quarter up until two market days after the financial information is released, is treated as closed periods. Procedures are in place to detect any violations.

During the year under review, the Bank has shared a reasonable portion of its profit with shareholders in the form of a dividend while retaining the balance to support its growth and development.

All shareholders of the Bank are treated equally on the basis of one vote per ordinary share. The Bank has not issued any non-voting ordinary shares or preference shares.

Annual General Meeting

The Annual General Meeting of the Bank is normally held within a period of one year from the date of the previous meeting after giving adequate notice to shareholders as required by the Articles of Association. The Annual Report and Notice of Meeting are sent to all shareholders in order to enable effective shareholder participation at the meeting. Shareholders have the opportunity to obtain the Annual Report as an electronic or printed document. Extraordinary General Meetings are held to obtain shareholder approval on matters that require such approval.

Annual Corporate Governance Report for the year ended 31 December 2018 published in terms of Section 3 (1) (xvi) of the Banking Act Direction No. 11 of 2007

Disclosure on Corporate Governance made in Terms of Section 3 (8) of the Banking Act Direction No. 11 of 2007 of the Central Bank of Sri Lanka

Independent assurance

The External Auditors have performed procedures set out in Sri Lanka Related Services Practice Statement 4750 (SLRSPS 4750) issued by The Institute of Chartered Accountants of Sri Lanka, to meet the compliance requirement of the Corporate Governance Direction. Their findings presented in their Report addressed to the Board are consistent with the matters disclosed above and did not identify any inconsistencies to those reported above by the Board.