SLID SIGNSMOU WITH ICCSLK

Great expectations forGender Diversity

on BoardsBy Rachael Johnson, (ACCA)

Great expectations forGender Diversity

on BoardsBy Rachael Johnson, (ACCA)

SLID/EY hostswebinar on

‘The Integrity Agenda -The HeightenedRole of Boards’

SLID and CIMAWebinar on

“EntrepreneurshipDuring a Pandemic”

SLID/EY hostswebinar on

‘The Integrity Agenda -The HeightenedRole of Boards’

SLID and CIMAWebinar on

“EntrepreneurshipDuring a Pandemic”

SLID and BDOOrganizes 2021Post-budgetWebinar

SLID SIGNSMOU WITH ICCSLK

SLID and BDOOrganizes 2021Post-budgetWebinar

VOLUME 20 ISSUE 03

02

ContentsSLID/EY hosts webinar on ‘The Integrity Agenda - The Heightened Role of Boards’

Great expectations for Gender Diversity on Boards

SLID and BDO Organizes 2021 Post-budget Webinar

SLID and CIMA Webinar on “Entrepreneurship During a Pandemic”

JF Packaging Limited leading the Green Innovation.

KPMG hosts the Audit Committee Forum of SLID on “Implications for Audit Committees arising from COVID-19”

Going Digital: Re-inventing to survive and thrive

SECRETARIAT NEWS

NEW MEMBERS

02

04

06

07

09

12

17

1821

EDITOR : Mr. A. R. RasiahCEO : Ms. Radika Obeyesekere

SLID OFFICE (New Address)Room 166Cinnamon Grand ColomboNo. 77, Galle Road,Colombo 03

Articles and comments therein are views of the author concerned and does not represent view of SLID

02

SLID in collaboration with its knowledge sharing partner Ernst & Young (EY), held a timely webinar discussion recently on

‘The Integrity Agenda – the heightened role of boards’. The session focused on how directors could steer their companies with integrity in the current environment.

The panel comprised of Sunil Wijesinha, Chairman of United Motors PLC, Watawala Plantations PLC and RIL Property PLC, Murtaza Esufally, Chairman of Hemas Hospitals, Hemas Pharmaceuticals, Managing Director of Morison PLC and Non-Executive Chairman of the Centre for Poverty Analysis with Hiranthi Fonseka, Partner of Ernst & Young as the moderator. The keynote presentation was made by EY’s ASEAN Forensic and Integrity Services Leader Ramesh Moosa. The webinar was an initiative taken by the Institute’s INED Forum and was extended to all

SLID/EY hosts webinar on ‘The Integrity Agenda - The Heightened Role of Boards’

Mr. Murtaza Esufally

Mr. Sunil Wijesinha

Ms. Hiranthi Fonseka

Mr. Ramesh Moosa

SLID members as well as the clients of EY in Sri Lanka.

“In this social media driven world, we know that adverse news travels rapidly. Any event of fraud could severely impact an organisation’s reputation and will involve a great deal of cost and effort to recover from such damaging, adverse revelation. An investigative process will negatively impact the morale of the management and employees, and in regulated industries it will attract very close scrutiny by the regulators,” said Ramesh Moosa while identifying asset misappropriations, bribery and corruption, and financial statement fraud as common fraud schemes.

He added that the opportunity to commit fraud in current times is heightened by work force reductions and displacements which adversely affected the operation of internal controls and segregation of duties; remote working may expose access controls to cyber compromises and management overrides and workarounds posed higher risks.

“In the current times, the pressure and opportunity to commit fraud are heightened as is its rationalisation,” he further stated.

Sharing insights from EY’s Global Integrity Report 2020, a global survey which involved about 3,600 respondents, Moosa said that 90% of the survey respondents believed that COVID-19 posed a risk to ethical business conduct in their organisations. Commenting on the role of a board director, he said that board directors have a role to ensure performance and conformance and that the relationship between these two should be viewed as a symbiotic relationship where conformance supports performance which will enable integrity-led organisations to flourish.

“Defining what integrity means to the business and investing in it, leveraging technology and data to automate, detect and monitor risk indicators, transforming the compliance function and programs to be forward-looking and developing a robust crisis response capability that would secure stakeholders’ trust are four action points for Boards,” said Moosa.

Responding to the moderator’s request to provide his views on the Integrity Agenda for Sri Lankan companies, panellist Murtaza Esufally said that integrity, credibility and reputation have always been extremely important.

“In Sri Lanka’s quest for development, we need FDIs and technology transfers to Sri Lankan companies through JVs. Companies in Singapore, Hong Kong, Holland, UK and Ireland get the highest FDIs since they have built a culture of integrity and trust in institutions in those countries,” he added.

Panellist Sunil Wijesinha said that the majority of Boards in Sri Lanka do give a high priority to the Integrity Agenda and that it varies according to whether or not the company is a public listed company or is in a regulated industry.

“Over the last 10 years we have seen the regulators tightening the regulations. Hence, there is a lot of pressure on Boards to make sure that the integrity of financial reports and business operations are accurate without any fraud. There is a huge responsibility on the Boards and senior management. During the current COVID times, we have to be careful of the pressure to perform which is much more complex due to the incentives that are being given. I always promote the concept of whistle blowing which can bring about great benefits” he added.

He also said that while the private sector has gone to great lengths to introduce regulations and best practices, it is strongly recommended that the public sector follows suit.

Moosa’s presentation was followed by a fruitful Question and Answer session with the participation of the audience. Questions were raised with regard to the practical issues and the panellists responded drawing from their own experiences.

Finally, in her closing remarks, the moderator Hiranthi Fonseka observed that whilst integrity and trust are not new to Sri Lankans, the discussion on the Integrity Agenda is actually a wakeup call for boards to become more vigilant.

02

03

04

For over a century ACCA has been shaped and led by many pioneering women and we certainly owe a large part of our

identity, diversity, as well as our past and future to them. ACCA was the first professional accountancy body to admit a woman – Ethel Ayres Purdie – into its membership in 1909 in the UK. And, earlier this year, we celebrated International Women’s Day by paying tribute to her.

Greater gender equality remains at the top of ACCA’s worldwide agenda today and our Professional Insights team is currently working on a comprehensive report on diversity and inclusion (D&I) for release in January 2021 following on from our Increasing Gender Diversity to Boost Performance project. Our Chief Executive, Helen Brand in the UK, and our current President, Jenny Gu in Shanghai, as well as the women on our Executive Team, serve as inspirations for us to be strong advocates of women’s representation and inclusiveness as leaders and on boards. It is part of our mission to encourage women to overcome systematic barriers, to recognize how important wellbeing and resilience are in relation to success and in leading with much-needed empathy and compassion in today’s tumultuous world.

The business case for demonstrating how women on boards can improve results, provide different perspectives and better connect with a more diverse customer base and workforce was already made before Covid-19 struck. More companies, most recently in the global financial services industry, are realizing how gender diversity can drive innovation and increase productivity companywide. Citigroup recently appointed Jane Fraser as its new CEO, making her the first female head of a large Wall Street bank. As Bloomberg reported, “Citigroup has finally taken a hammer to one of the most-glaring glass ceilings in the finance world.”

What took so long? And why do we still not see women as a proportion of the population appointed as CEOs? Recent statistics show us that even though progress is being made, we still have a long way to go in improving women’s representation on boards.

The Sri Lankan government’s announcement last year calling for all listed companies to have at least 20% of board seats occupied by women by the end of December 2022 is encouraging. In addition, IFC’s partnerships with local institutions to train more than 400 women for board directorships helps tremendously. Its relationships with the Dhaka and Colombo stock exchanges to create a database of female directors of listed company boards are also paying off. However, the rate of change remains very slow and we need to focus on how to include more women on boards to ensure these goals are met.

Throughout the pandemic, we saw how women presidents and prime ministers around the world managed and controlled the pandemic effectively in their countries. There also is an increasing number of female entrepreneurs making social and environmental impacts around the region. Samar Hasan founder and CEO of Epiphany, an incubator in Pakistan, works to help protect communities and local economies during such unprecedented times, and has been successful at getting more women in Pakistan into the workforce. Nishita Shah, owner and director of Precious Shipping, one of Thailand’s large dry-bulk shipping companies, is another advocate of women representation and pay equality around Southeast Asia.

When you look at all these exemplary women helping small and medium sized businesses survive and thrive in this fast-changing risk landscape, you think ‘why are there still companies in the world with only men on their Boards?’ And why in 2020 are women still the minority on boards and executive positions of some of the largest and most influential companies in the world?

At ACCA, we believe it is long-overdue for boards to look beyond quotas, targets and tick-boxing, and to re-think how we define leadership. Boards must step back and reassess how their companies encourage women and include them. It is their duty to lead the way in reversing the many conscious and unconscious biases that cause gender underrepresentation. Covid-19 has given them a unique opportunity to address gender diversity and equality as they re-think their company’s business strategy and purpose. There are several initiatives they can adopt to help make more women visible at the top.

To start, boards should assess the presence of women leaders in their companies and instill a culture that provides them with the same paths that men have toward CEO and board level appointments. This means widening their lenses and reassessing the criteria traditionally applied to leadership roles. This could prove very valuable as companies embark on new projects to pivot their business and help build a more resilient and sustainable future.

Another way to improve women representation is to make updated changes to board appointment, term limits and succession strategies. Boards should look harder at the traditional assumptions embedded around leadership skills and backgrounds and update them with a broader set of metrics more relevant to today’s fast-evolving world. For example, diverse expertise in climate

Great expectations for Gender

Diversity on BoardsBy Rachael Johnson, Head of Risk Management

and Corporate Governance, Professional Insights, Association of Chartered Certified Accountants (ACCA)

05

change and sustainable finance, health & safety, digitalization, data privacy and important cognitive skills such as timely decision-making, problem-solving, and effective communication skills.

Companies should also look across sectors and geographic regions depending on where their customer base and supply lines lie. Investors and other shareholders are increasingly requiring companies to disclose information about their D&I programs and the composition of their board obviously serves as a first impression. Covid-19 has only accelerated investors’ focus on environmental, social and governance best practices, and gender diversity is a major part of this. We believe shareholder engagement is critical to companies’ D&I progress, helping to enhance policies on equal pay and overall culture setting.

Boards must also lead the way in getting employees actively involved in gender D&I efforts, for example, by serving as mentors and sponsors and becoming more like allies

and coaches. We are seeing established mentor programs prove very effective at helping women progress into leadership roles. Mentoring or other types of coaching and scholarship programs can open doors otherwise closed for women, giving them the networking, exposure and experience they need to advance their career.

Additionally, boards must ensure that these programs encourage both women and men already in those key roles to mentor those who are looking to follow in the same direction. An HR executive recently said how she saw ‘influential’ sponsors move mountains for women and challenge stereotypical thinking in certain succession meetings. The presence of highly visible, respected and indeed accessible role models is a powerful way to naturally increase D&I throughout the workplace.

You should see a strong chain effect: improving gender equity at the top is likely to alter perceptions throughout the company and ultimately result in more women being considered for leadership appointments all the way up to the board. Creating a feeling of diverse and inclusiveness companywide will help move women to the top more holistically and show stakeholders and shareholders alike how much the company values women’s contributions.

We welcome the creation of more Chief Diversity Officers in larger companies, not only due to the social upheaval this year with Covid-19 and Black Lives Matter movement but also in response to pressure from pensions and other investors who want to see better women representation. Having a focused initiative from the top that tracks and measures performance in this respect sends a powerful message to a business and its eco-system.

As we continue our journey on impacting change, we remain focused on empowering our members and students to lead with purpose and to help them get their organizations committed to improving gender diversity and inclusiveness from the top.

© ACCA Confidential

% of director seats held by women in MSCI ACWI constituent companies in Asia-Pacific

Country 2016 2017 2018 2019Australia 26% 28.7% 31.5% 31.2%China 8.5% 9.7% 11.1% 11.4%Hong Kong 10.6% 11.3% 11% 12.4%India 12.8% 13.8% 14% 15.9%Indonesia 2.8% 3.3% 3.3% 10.1%

Macau 13.8% 17.2% 16.7% 17.9%Malaysia 15.3% 20.2% 21.9% 25.3%New Zealand 29.6% 30% 30.2% 38.2%Philippines 9.5% 10.5% 10.7% 11.9%Singapore 11.2% 12.9% 13.7% 18.4%South Korea 2.4% 2.1% 2.3% 3.3%Thailand 12.2% 11.8% 12.7% 13.8%

Source: MSCI

© ACCA Confidential

§ AXA Investment Managers is one of several investors this year to expand their gender diversity voting policy to improve governance standards

§ “AXA IM has and will continue to push all companies, in both developed and emerging markets, to disclose and report against their executive committee gender diversity policy and targets. AXA IM will be holding companies accountable with respect to these targets and will seek to put pressure, through its engagement efforts, on companies that continue to fall short of their defined target or market best practice to explain shortcomings and how they intend to address the situation. AXA IM may also use its voting power at a company general meeting as a tool to address concerns at companies that fail to provide appropriate disclosure and measures on executive committee diversity and have no credible plan to address the topic”

Investors’ Calling for Change

© ACCA Confidential

§ In 2010, the Australian Stock Exchange’s (ASX) Corporate Governance Council introduced policies to disclose: a diversity policy; gender diversity objectives and progress; and board selection processes; as well as the proportion of women in senior executive positions and on the board

§ Female directors accounted for less than 9% of directors of Australian companies in 2009, but this number grew to 14% in 2013 as a result of ASX’s new disclosure rules. As our next slide shows, Australia’s rate of progress for women on boards one of the fastest in the world with 31.2% in 2019

§ What’s most notable about this approach is that it has forced change without quotas; in fact, without any mandatory legislation. Its diversity policies operate on a comply or explain basis, meaning that companies must either comply with the prescribed policies or explain their failure to do so

Force for change: The Case Down Under

06

Dr. Indrajith Coomaraswamy

Dr. Kapila Senanayake

Dr. Anila Dias Bandaranaike

Mr. Nihal Fonseka

Mr. Vish Govindasamy

Ms. Sarah Afker

Ms. Dinusha Rajapakse

Mr. Shiran Fernando

SLID and BDO Organizes

2021 Post-budget Webinar

The Sri Lanka Institute of Directors (SLID) – Sri Lanka’s leading member institute for Directors together with BDO – the international public accounting, tax and business consultancy firm organized a 2021 post budget webinar recently for the benefit of SLID members

and BDO clients. Experts from the private and public sector provided their views of the budget at the outset and participated in a panel discussion answering questions from the participants. The expert panel moderated by Shiran Fernando – Chief Economist of the Ceylon Chamber of Commerce included Dr, Indrajith Coomaraswamy – former Governor of the Central Bank of Sri Lanka who delivered the keynote address, Dr. Kapila Senanayake-Director General, Department of Fiscal Policy, Dr. Anila Dias Bandaranaike – former Assistant Governor, Central Bank of Sri Lanka, Nihal Fonseka – former CEO/Director of DFCC, Vish Govindasamy – Vice Chairman, Ceylon Chamber of Commerce, Sarah Afker – Partner, BDO, Dinusha Rajapaksha – Associate Director, BDO.

Addressing the participants in his keynote Dr. Coomaraswamy said that in response to the pandemic, central banks across the world have been extremely aggressive in driving down policy rates to historically low levels, in some countries negative nominal rates, and they have signalled , given forward guidance that the rates will remain low for a long time, reduced SRR, ramped up asset purchase programmes, relaxed regulatory standards to provide liquidity to financial sector. He also said that the budget 2021 should be viewed in the light of the current pandemic and the global economic outlook, and in the next 6-9 months the Government will need to balance the twin challenges of protecting lives and protecting the economy. Emphasizing on the economic crisis brought about by the pandemic, he said that there has been concurrent demand side and supply side shocks which has amplified the effects of this crisis with SMEs and self employed being the most affected with the services sector being impacted disproportionately than during other crises in the past. He also said that for the first time in 3 decades, there will be an increase in global poverty and hunger, and exacerbation of inequality.

Panelist Sarah Afker said that the 2021 budget has plenty of gifts as well as a few pinches and one of the marked positives of the budget is that it reaffirms the changes that were pronounced by the Cabinet early in the year giving consistency to Government policy. Plenty of exemptions and concessions had been granted in the areas of personal as well as corporate tax especially for the agriculture, exports, dairy, fabrics, tourism, information technology and pharma sectors which encourages domestic production and import replacement under the Strategic Development Projects Act. Afker went on to present in detail the other salient features of Budget 2021 to the participants. Including the many tax administration and relief measures that have been included.

07

Dr. Kapila Senanayake expressing his views on the budget said that the 2021 budget is development and forward oriented, which is aimed at accelerating economic growth and reducing poverty while providing a simple and transparent tax system paving the way for inclusive growth over the medium term.

Dr. Anila Dias Bandaranaike differed with other panelists on the benefits of the budget 2021 referring to discrepancies in the budget speech and the actual amounts allocated for different sectors in the Appropriation Bill. She was also of the view that the budget 2021 strategies are a mix of the Mrs. Bandaranaike’s 1970-77 import substitution era and JRJ’s 1977-1990 investment & export promotion era with lots of tax holidays, both being unsuccessful initiatives in the context of expectations of what they would deliver.

Expressing his views, Nihal Fonseka said that the budget proposes some very sound and very good programmes in the medium term, but that there were challenges in the short term even in 2021 which might derail them unless we are very careful. The 3rd part of the budget – medium term strategic framework that has been announced is a very encouraging, sound and good one which however will take

some time to materialize in terms of implementation of the initiatives when it comes to contribution to the revenue, for instance in 2021 we may not see too much of it coming in and it may take 2-3 years.

Vish Govindasamy expressing the private sector thinking on the budget said that overall they are happy with the budget as there are no handouts as in many previous budgets and there are no major changes to the tax structure done over the last two years leading to consistency in taxes. However there are concerns in the lack of new infrastructure in the healthcare sector, an area that we are lagging behind which has been evident during this pandemic and there is a need to buildup on the healthcare infrastructure. Also, the private sector needs clarity on the retirement age in the form of a contractual or legislative obligation. Furthermore, he expressed that going away from the collective wage agreement from a union-based wage agreement which is currently being done in the plantation sector is also a concern for the private sector since it opens the doors to other sectors as well.

The webinar concluded with a QA session.

The Women Directors’ Forum of the Sri Lanka Institute of Directors together with CIMA Sri Lanka recently hosted a panel discussion on “Entrepreneurship During a Pandemic” to discuss the challenges faced by entrepreneurs and startup companies during the current pandemic.

The keynote address was delivered by Dr. Nadeera Nilupamali PhD, a virologist, immunologist, epidemiologist and Co-founder of Sri Lankan healthcare technology startup Immunify.me. Launched in 2017 Immunify.me has broken geographical boundaries to enter many markets worldwide. Dr. Nilupamali took the opportunity to highlight the challenges they faced as a young startup company in a globally competitive healthcare technology market and the successful strategies they used to steer the company through the pandemic. The eminent panel included Steven Enderby-Chairman, Ironwood Capital Partners and Lakmini Wijesundera-Co-founder and CEO of IronOne Technologies (Pvt) Ltd and BoardPac. The session was moderated by Aroshi Nanayakkara- Vice Chairperson of SLID, CEO of Global Consulting Company and Independent Non-Executive Director of Sampath Bank PLC and Hela Clothing (Pvt) Ltd.

Ms. Aroshi Nanayakkara

Moderator

Dr. Nadeera Nilupamali

Keynote Speaker

Mr. Steven Enderby Panelist

Ms. Lakmini Wijesundera

Panelist

SLID and CIMA Webinar on “Entrepreneurship During a Pandemic”

08

“Over 3 million children die every year all over the world due to vaccine preventable diseases. One of the main reasons for this appallingly high number is the that we use a 70-year-old paper-based vaccination record which results in the inability of the policymakers to make critical decisions in a timely manner. Immunify.Me is a cloud-based ecosystem which digitizes the immunization recordkeeping process thereby bridging the immunization gap and has won many international awards and grants including the prestigious GAVI Influencer Award which is the World Health Organization Global Vaccine Alliance” said Dr. Nilupamali.

“We are facing unprecedented times during this pandemic which poses great challenges and threats to entrepreneurs and their organizations. However, it is important to note that every crisis brings about unique opportunities too. Entrepreneurs need to focus and understand the opportunities that are lying ahead. With the onset of the pandemic, we identified 3 main roadblocks. First and foremost, we were unable to travel for in-person meetings which is the most effective. The second was the difficulty in pitching for a product/service that requires live demonstration. The third was natural delays occurring due to unavailability of tangible material. This was a disaster for a new product line since we were unable to pitch effectively to global clients” she added.

As a workaround to reach global clientele, Immunify.Me reached out to local embassies and consulates for their support which proved to be very encouraging making headway with many potential assignments with many more in the pipeline. Immunify.Me also took advantage of the trend of people turning in their masses to online media during the pandemic to launch their contact tracing app which went viral. They also used the web to identify companies and organizations which provided financial support and to identify non-traditional players

whom they could partner. Highlighting the need for innovation and out of the box thinking, Dr. Nilupamali said that a crisis also provided opportunities to succeed by re-evaluating and switching priorities to suit the situation. Forging alliances with competitors and working closely with them was also a strategy used by Immunify.Me during the crisis. They also used the time that was freed by working from home to make improvements to their products, conform to higher international standards which is crucial for success in the healthcare marketplace, employee training, insourcing some outsourced work to reduce costs, researching and finding new markets etc. Concluding her keynote, Dr. Nilupamali stated that any adversity or problem can be overcome as a team with continuous dedication.

Panelist Steven Enderby sharing his thoughts on how large companies keep innovating themselves said that crises are often create the required impetus for large established organizations to change processes structures and strategies built over decades which had brought success over the years.

“One of the reasons why great businesses do not survive is because they are reluctant to change. A crisis such as this pandemic drives change as there is no other option than to change in order to continue to service the market and customers. What was done last year will not hold good anymore. One needs to find different routes to the market. Furthermore, in these types of environments, leaders should strive for long term structural change. One of the reasons that I found really liberating within the pandemic environment was that all of a sudden there is no time for arguments and those endless meetings about why we cannot change. You’ve just got to get on and do it” he added.

Speaking on the need for innovation during a pandemic, Lakmini Wijesundera said “Innovation is any kind of difference or change, so we had to do a lot of changes. To survive we could not go with the same customers: they started thinking differently and wanted different things, competitors came out with new products and features. Innovation should be continuous even during a pandemic. In the absence of innovation, competitors will catch up and overtake you. So, product-wise we innovated. Also, our sales and marketing footprint expanded during the pandemic to countries that we never targeted with client inquiries flowing in”.

Reaching out to entrepreneurs, she added “The pandemic struck us at a time that we were growing. We did not expect not being able to meet our clients face to face which is preferred by our audience. However, we have overcome this challenge and it has been an interesting journey. It is just a matter of focusing on what you like to do and enjoying it. Saddle up for some hard but enjoyable work”.

“Face reality as it is, not as it was or as you

wish it to be.”Jack Welch

09

JF Packaging Limited, a forerunner in Sri Lanka’s fixable packaging industry having established as the

‘Most Awarded Packaging Company’ is leading the Green Innovation. JF Packaging had always been known for excellent Research and Development skills in the Packaging Industry and remains the undisputed choice of customers wanting innovative packaging solutions.

JF Packaging has the capabilities to produce recyclable packaging materials for various type of packaging applications. We are also capable of providing bio-degradable & compostable packaging solutions. The Company had developed these new range of offering and have had extensive testing for commercial viability over the past years in line with the world packaging trends. Our hard work and capabilities have been affirmed by winning various packaging competitions both locally and internationally.

“We take pride in establishing ourselves as the most awarded

packaging company in Sri Lanka. These awards of recognition endorse our continuous efforts to provide the finest quality product and solutions to the Sri Lankan industries, especially in the food and FMCG sector. We will continue to focus on developing innovative and sustainable packaging solutions and product designs to lead the packaging industry” said Mr. K. P. David, Managing Director of JF Packaging Limited.

“We strongly believe in maintaining the highest standards at all times. This is made possible by our skilled staff working with the highest technology at our state-of-the-art facility. JF Packaging complies with the local and international standards including the ISO 20000:2005, ISO9001:2015, HACCP clarification and FSSC 22000 standard clarifications”, Mr. David added.

JF Packaging is currently engaged in commercial scale sustainable packaging requirements of the market. The company supplies almost all FMCG companies, including multinationals operating in Sri Lanka, and finds its packaging solutions and products filling up the shelves of supermarkets around the country.

The Company has proved itself by championing award-winning products and initiative of innovative products development committed to upholding leading technology practices, the company has also invested heavily in latest technology machineries in the recent past. With these new investments, the company is geared to handle production requirements in larger capacities to meet the market’s growing demand.

Founded in 1987, JF Packaging Limited has come a long way and has worked tirelessly to give its customers high quality packaging solutions for 30 years. Today it is one of Sri Lanka’s premier packaging group of companies, with a workforce of over 350 people, applying innovation, technology and stringent adherence to the highest international standards of certification.

JF Packaging Limited leading the Green Innovation.

09

10

Thamali AbeyratneT: +94767329000E: Thamali.Abeyratne@aicpa-cima.com

Kith PereraT: +94776279987E: Kith.Perera@aicpa-cima.com

Join the CIMA C-Suite Businessand Finance ProgrammeFor all GSLID members, we have an exclusive deal where 25% of the tuitionfee will be waived off.

The program is held twice a year and only 30 applications are accepted each year. The intake for May 2021 exam is now on with registrations closing on 31st March 2021.

For more information, please contact:

“I was one ofthe exclusive 30”

Hiran Bibile General ManagerEdifice International Holdings (Pvt) Ltd

011

Thamali AbeyratneT: +94767329000E: Thamali.Abeyratne@aicpa-cima.com

Kith PereraT: +94776279987E: Kith.Perera@aicpa-cima.com

Join the CIMA C-Suite Businessand Finance ProgrammeFor all GSLID members, we have an exclusive deal where 25% of the tuitionfee will be waived off.

The program is held twice a year and only 30 applications are accepted each year. The intake for May 2021 exam is now on with registrations closing on 31st March 2021.

For more information, please contact:

“I was one ofthe exclusive 30”

Hiran Bibile General ManagerEdifice International Holdings (Pvt) Ltd

12

KPMG hosts the Audit Committee Forum of SLID on “Implications for

Audit Committees arising from

COVID-19”

As we look back at the passage of time, the period of turmoil that began in late March due to COVID-19 had

steered towards recovery after six months until just last week. Sri Lanka is again affected by this new wave of COVID-19, with number of cases increasing rapidly. As uncertainty has become a consistent factor of 2020, Audit Committees may need to widen their scope to address the challenges that arise during such unprecedented times.

The 22nd Audit Committee Forum of SLID was hosted by KPMG on 06th October, under the theme “Implications for Audit Committees arising from COVID-19”. The session was a follow up to the session in May

and consisted of four presentations and concluded with a panel discussion.

Thamali Rodrigo (Partner – KPMG of SLID in Sri Lanka) started the session with her presentation on “Emerging Focus Areas for External Audit”, followed by a presentation on “Core responsibilities with emerging priorities and how to balance them” by Hiroshini Fernando (Non-Executive Director – DFCC Bank PLC, United Motors Lanka PLC and CEO – R I L Property PLC). Natalie Warawita (Director – Group Risk & Control, MAS Holdings) provided valuable insight on “Oversight through Virtual Communication.” The final presentation was made by SLID council member Aruni Rajakarier (Non-Executive Director – John Keells PLC & JL Morrisons, Founder/Director – SheConsults Pvt Ltd) on “Broader Reporting & Communication Aspects”.

The rapidly changing risk landscape has increased the need for relevant and reliable information. While referring to the increased uncertainty caused by the heightened difficulty in financial estimations, judgements and reporting, including Going Concern assessments, the following takeaways were noted in the first session:

The BAC should examine and vigorously challenge financial estimates in areas such as fair value estimations and Going Concern justifications, and seek expert assistance when it lacks it, so the integrity of financial reports to stakeholders is maintained.

It should increase the frequency and substance of contact with the External Auditors, to better understand their concerns and benefit from their insights. This discussion could also cover the scope of disclosures required to make financial reports most meaningful.

Have a process to identify early signs of financial stress, going concern considerations, and other financial reporting implications, such as accounting estimates and events after the reporting period to ensure they’re accurately disclosed.

Thamali Rodrigo(Partner – KPMG in Sri Lanka)

Hiroshini Fernando (Non-Executive Director – DFCC

Bank PLC, United Motors Lanka PLC and CEO – R I L Property PLC)

Moderator Ranjani Joseph

(Partner – KPMG in Sri Lanka)

13

Audit committees are having to be vigilant on an expanding range of issues despite their fundamental responsibilities in respect to the oversight of financial reporting and internal controls. While emphasizing on the changed business practices induced by the pandemic (including WFH and increased digital commerce) have serious implications for Internal Control and fraud risk, balancing their Core Responsibilities with such emerging priorities was discussed in the next session with the following key takeaways:

BAC should pay attention to Third-party risk management, scenario planning/business plans, impact of specific legislation, and comprehensive business continuity thinking that may have a financial reporting impact.

Natalie Warawita (Director – Group Risk & Control, MAS Holdings)

Internal Audit has to position itself closer to the business, and become agile and tech- enabled (via IT and analytics), to better meet the challenges that arise.

Fraud risk is heightened by “opportunities” in the wake of changed business practices and by greater pressure on people due to personal circumstances. Unrealistic performance targets which are insensitive to the drastically changed environment can add to the pressure for fraud.

Another focus area of the session was to improve how BACs are adapting their way of working to function and fulfill their responsibilities without meeting physically. It was reiterated that the BAC must recognize and address its responsibility to monitor the management of risk and following were some key observations:

The BAC is required to provide oversight on the process of governance, risk & controls in the organization and not simply focus on financial reporting aspects only.

An area of risk that is likely to require external expert help is that of Cyber Risk.

The BAC must bring itself closer to the scene, with (more) frequent communication (virtual or otherwise) with Internal Audit, the CEO & CFO, and other members of management.

Combined assurance (3 lines of defense working together) will be helpful to mitigate risks from this volatile and uncertain situation. It’s a culture of each level performing their roles effectively supported by a rigorous process for monitoring with BAC oversight.

To enhance trust and transparency, the audit committee can play a crucial role in respect to broader corporate reporting, overseeing a wider set of business and reporting risks. This key aspects highlighted in the final session were:

ACs have a role in ensuring businesses understand and communicate their value propositions to different stakeholders, balancing profit with purpose, and thinking about how the business has, or can have, a social impact and create and preserve value for wider stakeholders.

In the wake of the current crisis, investors are also increasingly asking for more forward-looking information and disclosures which can be provided by ESG reporting. Examples of having a process to track Non-financial capitals like Manufactured, Intellectual, Human, Natural, Social & relationship include; registers for fixed assets, licenses, complaints, human resources, etc.

Many organizations overseas report broader information through mandatory and voluntary narrative

reporting. But there is a lot of room for improvement in Sri Lanka

The presentations were followed by a panel discussion moderated by Ranjani Joseph (Partner – KPMG in Sri Lanka). The discussions helped shed light and clarify practical issues faced by BAC members in fulfilling their responsibilities. The important role played by the external auditors in helping the BAC to identify risks and mitigate

Aruni Rajakarier (Non-Executive Director

John Keells PLC, JL Morrisons, Founder/Director

SheConsults Pvt Ltd)

14

them and the importance of non financial information and other narrative reporting in annual reports and the crucial role BAC should play were also highlighted during the discussions

In concluding the session, Suren Rajakarier (Partner KPMG in Sri Lanka) who coordinates the activities of the Forum stressed on the key role the BAC plays in creating and maintaining a culture and environment that supports the integrity and timely presentation of useful information about an organization to its stakeholders and was hopeful that such discussions will uplift the standard of BAC oversight.

The audit committee forum provides much insight for members of audit committees on how to address the emerging challenges with the ever changing risk environment. The Forum which operates under the aegis of the Sri Lanka Institute of Directors (SLID) has been supported and enabled since inception by KPMG in Sri Lanka, in line with its globally recognised Audit Committee Institute initiative. KPMG’s Audit Committee Institute provides audit committee members with practical insights, resources, and peer exchange opportunities focused on strengthening oversight of financial reporting, risk management and audit quality.

15

16

17

“In every joke, there’s a little joke” is a Russian saying to mean that jokes are mostly based on truth. Amidst the pandemic chaos was an interesting memo that was circulated in social media that depicted a question:

Who led the digital transformation of your company?

A) CEO

B) CTO

C) COVID-19

And the answer choice C – Covid 19 was circled in red.

The memo certainly fits the Russian saying and is well thought provoking. But what really was the earlier red tape? Didn’t we all have some kind of digital transformation happening in our companies pre-Covid? What then was missing or rather what is present now that is different to what it was previously? It is always a good idea to re-visit the basics of Digitalization before attempting to answer any of these questions.

We often confuse ourselves between the meanings of Digitization and Digitalization. Yes, there are two more letters in the middle that change the whole meaning. Digitization is the process of converting information from a physical format into a digital one. Digitalization is when digitization is leveraged to improve business processes.

As humans, our needs keep ever evolving. In the past, our objective was to simply store Data electronically to ease the information retrieval process on demand. However, today the frequency of information retrieval has evolved to the point where we require predictive information and, in some cases, use them in autonomous actions too. And so, we now hear words such as Artificial Intelligence, Robotic Process Automation, digital services, etc, but have insufficient understanding that to use these tools, being successful in Digital transformation is the key.

Covid-19 pandemic certainly accelerated and reshaped the digital transformation agendas of companies and here’s how the red tape no longer became valid.

1. Experience of employee is now more important than ever

In the current context of the pandemic, with a majority of the employees having to remotely contribute to the functionality of the company, their experience in digital transformation has gone from “optional” to “mandatory”. Consequently, it is also getting the long deserved problem-solving focus to ensure that their experience is not compromised in any way.

2. Empowering customers and employees with tech support

As opposed to what it was pre Covid-19, nearly all jobs are now tech-enabled. This kind of shift in business fundamentals are inevitable due to government restrictions, customer need changes and a host of other factors. This results in creating tech support needs at an unprecedented scale. Real-time tech support interaction which used to be the preferred option can no longer suffice the need to support both employees and customers. Therefore, utilizing everything from digital FAQs to chatbots to AI are becoming necessary to cater to the expansion

of their support reach to allow customers and employees to be more empowered partners in resolving the issues they face. These techniques aren’t new, but the quantity and speed at which they’re being deployed are.

3. Automation is given prominence

Automation is nothing new – robotic process automation is already a billion-dollar market and Industrial automation equipment in many companies make up to 1% of the work force. But automation is moving from being considered in the innovation agenda to the resilience agenda due to new pressures on both the cost of labor and the need to reduce workforce in many workspaces. CTOs who’ve long supported automation are suddenly finding strong backing from CFOs and HRMs alike.

4. Involuntary review and re-assessment of the digital transformation

Many organizations have had the opportunity to effectively conduct involuntary self-audits on their technological capabilities where missing competences immediately became highlighted – more often than not, redundant or conflicting systems were identified as they were being used by their workforce! The results ensured ironing out conflicting systems with rationalization or re-aligning policy level decisions that accelerated the digital transformation process.

5. Resort to “Good” in light of Agile Manifesto

“The perfect is the enemy of the good” - Voltaire

A complete crisis has the ability to silence the inner perfections of an individual or an organization. In view of the dramatic disruption, many organizations have had the opportunity to re-negotiate a healthy relationship with digital transformation – prioritizing “It’s a working software!” attitude over “need more time to make it perfect” attitude.

To – do:

We all know that transformation, let alone digital transformation, is difficult. A recent survey conducted by Hanover Research revealed that 93% of key IT decision makers of large IT companies said that they were undergoing some kind of digital transformation. And 67% of the respondents were of the view that Infrastructure is the main part of their success strategy.

Therefore, for organizations embarking on digital transformation, having a “positive impact inventory” and a “right infrastructure” are both equally important and a great way to either get started or to accelerate efforts.

Encourage and identify the better ways of working you see emerging from the bottom level across your organization. Engaging with the teams you see driving positive changes, such as less perfectionism, faster automation, improved focus on employee experience as well as understanding of minimal infrastructure required are important too.

As the working conditions are dramatically reshaped, embracing digital transformation whilst keeping focus on agility, customer centricity and actionable insights will ensure success in achieving survival and thriving.

Shan Perera, who is currently the General Manager at Gestetner Digital counts over 12 years’ local and international experience including that in the office automation industry. He holds an MBA from the University of West London and a BEng(hons) in Telecommunications Engineering and is an enthusiast of technology and digital solution.

Going Digital: Re-inventing to survive and thrive

18

Innovation & Technology Committee comprises of Mr. Dilshan Rodrigo, Mr. Madu Ratnayake, Mr. Nuwan Perera, Ms. Hiranthi Fonseka, Mr. Nilanka Pieris, Ms. Thushara Wijewardena, Mr. Thurupathan Vijayakumar & Mr. Shazil Ismail.

This committee continues to be very active and has now come with a proposal to develop an out-of-the-box cloud app which will meet SLID needs on a 360 level. This will assist members too in many aspects.

18

SLID MOVES TOCINNAMON

GRANDIn keeping with its rapid expansion plans, the Sri Lanka Institute of Directors moved into a prestigious and convenient location at Cinnamon Grand Hotel on 19th October 2020.

Cinnamon Hotels are now one of the partners of SLID and offer special rates to members of SLID at all Cinnamon Hotels.

“We have come a long way from our humble beginnings more than a decade ago to a leading professional body, thanks to the support and assistance of its council, members and sponsors” added the Chairman.

Rebranding & Publicity Committee comprises of Mr. Charaka Perera, Ms. Shehara de Silva, Mr. Taslim Rahaman, Mr. Trevor Reckerman, Mr. Dusty Alahakoon, Mr. Shayan Kannangara, Mr. Santosh Menon, Ms. Sheron Jayasundara, Ms. Roshanie Jayasundara – Moraes & Mr. Asitha Pinnaduwa

In keeping with the development and expansion plans, proposals are in place to join forces with an advertising agency to redesign the current SLID logo, revamp the website and manage social media platforms in order to create better awareness amongst the commercial world in general and membership in particular.

Advocacy Committee comprises of Ms. Shehara de Silva, Mr. Taslim Rahaman & Mr. Trevor Reckerman

Board paper on the recommendations submitted, serious consideration is being given for International Partnerships with Global Network of Directors (GNDI) and Stewardship Asia Centre (SAC) so that SLID would stand to gain in reputational stature, as well as within its membership and industry.

COMMITTEE UPDATES

SECRETARIAT NEWS

19

The Sri Lanka Institute of Directors (SLID) recently signed an MOU with the Institute of Chartered Corporate Secretaries of Sri Lanka (ICCSLK) with the primary objective of collaborating to provide a platform for Board Secretaries of companies in the private and public sector to interact with one another, share experiences, learn and build the key competencies required to perform their roles effectively.

The MOU will be followed by the launch of a Board Secretaries Forum under the aegis of SLID in partnership with ICCSLK. The Forum will be chaired by SLID member Ms. Sitari Jayasundara who is also the Chief Legal & Compliance Officer/Board Secretary of HNB Assurance PLC. The Forum will host a number of initiatives and activity programs targeted at building world class Corporate Secretaries in Sri Lanka.

SLID continues to stand firmly at the forefront of promoting Good Governance in companies across various industries and in providing ‘best in class’ Board Leadership training to practicing directors as well as aspiring directors in both the private and public sectors.

Rasakantha Rasiah, the Chairman of SLID stated that “this is another joint venture that SLID has embarked on not only to assist those who intend to get linked in this sphere of activity but also to those who desire to enhance the knowledge and skills of those who are

already there. A series of joint seminars with ICCSLK as well as customized seminars to those in need of specialized training is planned. These of course will not be limited to Colombo and surrounding areas.” Adding further SLID’s Senior Vice Chairman, Faizal Salieh, said “The Board Secretary is an integral part of the Board governance process. In addition to enabling the roles and responsibilities of company directors, we’ve recognized the need to focus on the role and responsibilities of Board Secretaries and this Forum will work towards developing and aligning Board Secretaries to the increasing challenges faced by companies in today’s business environment.”

“We hope that the MOU will not only benefit the membership of both institutions but reach out to as many entities in the private and public sector that will contribute to the ease of doing business in Sri Lanka”, stated Helen De Silva, President of ICCSLK.

The Forum is expected to kick off in the first quarter of 2021.

MEMBER NEWSNew Appointments

• Ms. Gayani de Alwis

Global WiLAT Chairperson| Immediate Past Chairperson CILT Sri Lanka | Founding Chairperson & Advisor WiLAT Sri Lanka | Board Member WCIC

- Non-Executive Independent Director, Singer Sri Lanka Ltd - Global Chairperson, Women in Logistics and Transport (WiLAT)

SLID SIGNS MOU WITH ICCSLK

Space reserved by well-wisher

20

21

Mr. Chaminda Darshanapriya EdiriwickramaDirector/CEOLaugfs Gas PLC

Mr. Alston Ricky Barnett Director - SBU HeadHayleys Energy Services Lanka (Pvt) Ltd

Ms. Nishani Chrishanka Perera DirectorMoore Stephens Consulting (Pvt) Ltd

Capt. Gayan Arosha TudaweDirector - Information & Communication TechnologyTudawe Brothers (Pvt) Ltd

Mr. Sashitharan GanesanJoint Managing DirectorBuilt Element Limited

Mr. Talal RafiDirectorVenture Green Global (Pvt) Ltd

Mr. Indika Kariyawasam KiriwandeniyaDirectorSanasa General Insurance Co Ltd

Mr. Rajieve Mario FernandoDirector/CEOAutobahn (Pvt) Ltd

Mr. Sarath Lakshman AthukoralaSenior DirectorAssetline Leasing Company Limited

Mr. W.A.Thusith Indika Perera JayathilakeChairman/Managing DirectorIJVR Consultancy (Pvt) Ltd

Mr. Nafees NawazDirector Finance - Global OperationsAnsell Lanka (Pvt) Ltd

Mr. Nalaka Viduranga KuruwitaarachchigeFinancial ControllerAnsell Lanka (Pvt) Ltd

NEW MEMBERS

CORRECTION

22

23

24