Compliance with corporate governance code by public listed companies in Maldives / Aqisa Moosa

Abstract:

This study is about identifying the compliance of corporate governance code by public listed companies. In Maldives there are seven companies listed in stock market. These seven companies vary by the nature of business, the industry they perform and the share structure. In addition to that the legislations these companies have to follow have variations. To conduct the study, qualitative research has been done in which case study method has been chosen. Data was collected by interviewing the target population and by reviewing documents relate to companies. To analyze, interviewed data were transcribed, and then used content analysis to derive important information. From this information the research questions were answered. It is found that the compliance of the governance code vary in different companies as some companies are in the middle and some in the upper middle and some in the lowest level. It is also identified that those companies with high standards, strong internal systems are not due to the governance code, but the good practice adapted for a long time. By comparing the issues identified in the problem statement and the findings, there is high correlation of those issues with low compliance level. There are issues on conflicting role of chairman and CEO. However, most of the practice such as management, board, nomination and remuneration committee and audit committee has similarities. But it is identified that in some companies they couldn't practice accordingly due to government's intervention on company relations. The theories that are related to corporate governance code seems relevant as views of all the respondent indicated that separation of ownership and control is vital to address agency problem. Regardless of the extent which these companies are complying with governance code, it is found that these companies have high relation with stakeholders. There are legal, economic, and operational challenges that need to be addressed by the companies, shareholders and regulators.