A
Code made pursuant to Section 8(y) of the Investments and Securities
Act (ISA) 1999 to make provisions for the conduct of members
of Shareholders’ Associations during general meetings
of public companies and their relationship with public companies
outside the general meetings and for other purposes connected
therewith.
This
Code of Conduct is intended to ensure the highest standard of
conduct amongst association members and the companies with whom
they interact as bona fide shareholders.
The
code is designed to ensure that association members uphold high
ethical standards and make positive contributions in ensuring
that the affairs of public companies are run in an ethical and
transparent manner and also in compliance with the Code of Corporate
Governance for public companies.
This
code may be cited as the Code of Conduct for Shareholders’
Associations and their Members.
1.
ESTABLISHMENT AND MEMBERSHIP OF SHAREHOLDERS’ ASSOCIATIONS
(a)
A body of not less than 50 shareholders of public companies
may be established for the purpose of advancing the interest
of its members and influencing the standard of corporate governance
to optimize shareholders’ value.
(b) Such a body of shareholders shall be registered with the
Corporate Affairs Commission with not less than 5 persons as
trustees.
(c)
Membership of a Shareholders Association shall be open to all
shareholders on a voluntary basis.
(d)
The Association shall have a constitution or bye-laws which
shall govern the operation and membership of the Association.
(e)
The Association shall have an Executive Committee of not more
than 10 officers constituted through an electoral process.
(f)
The officers of the Association shall be elected for not more
than two terms of 3 years and such a shareholder shall not be
eligible for election until the expiration of 3 years after
his six year term.
(g)
The Association shall maintain books of accounts which shall
be subject to annual audit by a qualified auditor.
(h)
The Association shall file annual returns to the Corporate Affairs
Commission. It shall also file an annual report of its activities
with the Securities and Exchange Commission.
(i)
The Association shall meet periodically at least twice a year.
(j)
The Association shall respect and properly comply with all laws,
regulations, standards, norms and code of practice appropriate
to their association.
(k)
Shareholders’ Associations must recognize their duty to
the industry in which their companies operate and the need to
maintain the integrity of the financial market.
(l)
They shall not engage in conduct which is dishonest or which
may otherwise bring the Association into disrepute.
2.
ATTENDANCE OF ANNUAL OR EXTRA-ORDINARY GENERAL MEETING OF PUBLIC
COMPANIES
(a)
All shareholders or their proxies are entitled to attend the
general meetings of the company in which they are shareholders.
(b)
Members and officers of Shareholders’ Associations should
not attend AGM or EGM of a company in which they are not shareholders.
(c)
Shareholders should conduct themselves with decorum during AGM
or EGM of their companies.
(d)
A Shareholders’ Association should promote good governance
of public companies and strive to influence corporate and government
policies that seek to encourage investment and advance the interest
of shareholders and optimize shareholders’ value.
(e)
Shareholders’ Associations and their members should not
be manipulated at pre-AGM/EGM meetings.
3. MEMBERSHIP OF AUDIT COMMITTEE
(a)
Shareholders should ensure that members who are elected into
the audit committee of their company have knowledge of accounting
and internal control processes.
(b)
Membership of Audit Committee should be one term of three (3)
years provided that such shareholders shall not be eligible
for re-election until the expiration of 3 years after his term.
(c)
Shareholders through the shareholders’ association should
ensure that the internal control systems of the companies in
which they are shareholders, are effective.
4. The Regulatory Authorities would only recognize Shareholders’
Associations which comply with the provisions of this Code.
