Corporate governance

The board of directors and the management of State Electric Company Limited, aim to achieve and maintain a high standard of corporate governance. This includes implementing established policies and procedures that benefit shareholders and other stakeholders such as customers, suppliers and employees. STELCO adheres to the relevant laws and regulations and complies with the relevant guidelines and standards set out by regulatory bodies including the code of corporate governance for State Owned Enterprises published by the Privatization and Corporatization Board.

Memorandum of Association and Articles of Association

STELCO’s Articles of Association (AOA) and the Memorandum of Association (MOA) were revised with the approval of shareholders and subsequently recorded in the Ministry in 2024 to incorporate significant updates to various clauses, including those related to corporate governance practices and the Corporate Governance Code for State Owned Enterprises, published by Privatization and Corporatization Board.

Board of Directors

STELCO being a 100% state owned company, Board of Directors are appointed and removed from STELCO’s Board at the discretion of the Privatization and Corporatization Board (PCB) who act on behalf of the government.

The company's business shall be conducted in accordance with the decisions of the company's Board of Directors. And unless it is a matter required by law or regulation to be carried out by an external party, the company's Board of Directors has the authority to conduct affairs as permitted by the company's Articles of Association and Memorandum of Association.

The Board of Directors of the company has the necessary powers and authority to pursue the business objectives of the company as outlined in the company's Articles of Association or Memorandum of Association, as well as to achieve the business goals set by the shareholders and to undertake any other actions that are beneficial to the company.

The Articles of Association along with applicable laws outlines the obligations of directors. These obligations includes strategic and financial oversight, risk management, corporate governance, performance evaluation, and stakeholder engagement. Ensuring that directors adhere to these guidelines promotes sustainable growth and long-term success by acting in the best interests of the company and its stakeholders.

Terms of reference for Board Committees and Company Secretary

Audit committee

Audit Committee comprises of 03 Non- Executive, Independent directors.  The purpose of the Audit Committee is to assist Board of Directors and Management by Providing advice and guidance on the adequacy of the company’s initiatives for:

Values and ethics.

Governance structure.

Risk management.

Internal control framework.

Oversight of the internal audit activity, external auditors, and other providers of assurance.

Financial statements and public accountability reporting.

Company Secretary

The Company Secretary is appointed by the Board and is accountable to the Board of directors on all matters relating to his/her duties as an officer of the Company.  

The responsibilities of company secretary in relation to proper functioning of the board includes: 

Facilitating the efficient administration of Board meetings

Supporting effective Board administration and serving as link between the Directors and Management

Providing the Board as a whole and directors individually with detailed guidance as to how their responsibilities should be properly discharged in the best interests of the Company

Assisting and advising the Chairperson of the Board and reporting to the Board on the Company’s compliance with the corporate governance requirements.

Ensuring timely, accessible and accurate filing of corporate statutory records.

Board Evaluation

The Directors Evaluation is conducted annually in accordance with our Board Evaluation Policy. This approach is essential for evaluating the work of individual directors and guaranteeing ongoing improvement in their contributions to the overall effectiveness of the board.

Further, board performance criteria are set and evaluated by the Privatization & Corporatization Board.

Director’s Code of Ethics and Conflict of Interest

We have established a Directors Code of Ethics policy, which is a fundamental guideline for ensuring that our board members adhere to the highest standards of ethical conduct and integrity. This policy defines the expectations and principles for directors, guaranteeing that their actions and decisions consistently align with the organization's values and encourage transparency and trust.

The company secretary maintains a Register of Interests that contain details of shareholding in other businesses by directors, details of director’s major assets and current and past employment of directors.

Remuneration of Board Members and Employees

The Board members’ remuneration is determined by the Privatization and Corporatization Board’s Policy on “Categorization of State-Owned Enterprises and Remuneration of Board Members” which defines the basic salary and allowances to be provided to the Chairman, Executive and Non-Executive Directors. In addition to this, the remuneration for employees are determined in accordance with the salary structure approved by the Board.