New regulation for SOE company secretaries: Annual appraisals by the board

The Privatization and Corporatization Board (PCB) has published a new regulation governing the responsibilities of company secretaries of state-owned companies, recruiting individuals for the post and dismissing individuals from the post.

The regulation, approved by PCB last Wednesday, aims to ensure that individuals appointed as company secretaries in state-owned enterprises are qualified to carry out the role effectively, while also standardizing the responsibilities of company secretaries across these companies transparently.

According to PCB, the regulation will also enhance the effectiveness of the role of company secretaries and improve function of the company’s board while paving the way to ensure the role receives the recognition and respect it merits.

The regulation defines the requirements an individual being appointed a company secretary of a state-owned company must meet including their education and work experience. It also defines the responsibilities of the company secretary and the due process on appointing and dismissing individuals from the post.

In this regard, the minimum requirement an individual being appointed company secretary in various categories of state-owned companies.

The first category is banks and other financial institutions registered with Maldives Monetary Authority (MMA).

An individual being appointed company secretary for a company under this category must have five years of experience in management roles with seven years of experience in a related field. Candidates holding a Master’s degree meet the criteria with seven years of relevant experience, while those with only a Bachelor’s degree are required to have a minimum of nine years of relevant experience.

An individual being appointed to a company in the last category which includes subsidiaries of state-owned companies meet the requirement if they have a Bachelor’s degree and five years of experience in a related field.

Related fields according to the regulation include the legal field, the governance field, the management field and secretariate-related works.

An individual appointed company secretary must complete a training program conducted by Capital Market Development Authority within six months of assuming the post. The performance of the company secretary will be reviewed annually through an appraisal process, conducted in accordance with regulations established by the company’s board.

The regulation also stipulates circumstances where action can be taken against the company secretary. They include:

• Failure to fulfill responsibilities
• Negligence in discharging duties
• Misuse of power and resources
• Actions that violate the code of conduct of the company

As per the regulation, a company secretary can only be dismissed in a majority decision by the company’s board during a board meeting.

The regulation came into effect on Tuesday.

Maldives has over 30 state-owned companies. Their increased expenses and debt are a huge burden on the state. Moreover, there are mounting complaints over the companies being leveraged for political gains.