Corporate Governance – (Effective: October 2023)

CIMA has issued a Rule of Corporate Governance for Regulated Entities to promote effective management and safeguard the interests of stakeholders.
The Rule emphasize the establishment of a Governing Body responsible for implementing a corporate governance framework. This body oversees Senior Management, sets performance standards, and ensures alignment with the entity’s strategies and objectives. To foster objectivity, the Governing Body must establish clear and objective independence criteria for its members.
The remuneration policy plays a crucial role in corporate governance. It should avoid encouraging excessive risk-taking, align with the entity’s culture, objectives, and risk appetite, and consider the interests of stakeholders. The policy extends to the Governing Body, Senior Management, employees in Control Functions, and those with material impact on the entity’s risk exposures.
Transparency and effective communication are essential. The Governing Body must have access to accurate and timely information about the entity. It should approve systems and controls for communicating with CIMA regarding governance matters. Regular meetings, at least annually, are required, with detailed agendas provided in advance. Comprehensive minutes should document decisions, discussions, and follow-up actions.
The Governing Body must ensure it is not unduly influenced by Senior Management or other parties and has access to all relevant information. It approves policies and procedures to hold Senior Management accountable, in line with the entity’s culture, objectives, long-term interests, and risk management. It ensures the fair treatment of stakeholders and provides timely information for monitoring performance and risk exposures, maintaining accessible internal records.
Regulated entities must demonstrate the adequacy and effectiveness of their corporate governance framework as required by CIMA. The Authority will exercise supervisory judgment based on factors such as size, complexity, structure, nature of business, and risk profile.
If a regulated entity believes a particular rule is not applicable based on its operations, it must comprehensively demonstrate this to the Authority. The entity holds the responsibility for such demonstration.
Breaches of the Rule on Corporate Governance are subject to CIMA’s policies and procedures outlined in its Enforcement Manual, along with other powers provided in regulatory acts and the MAA.
The present Rule will come into effect on 13 October 2023.