Review Of The National Code Of Corporate Governance For Mauritius – What You Need To Know

• Jurisdiction: Mauricio
• Date: 01 February 2017

First published in October 2003, the National Code of Corporate Governance for Mauritius ("the Code") was revised in 2016 to align it with new laws and guidelines in Mauritius, as well as to recognise, learn and apply governance lessons from the global financial crisis, and identify and apply international best practices for Mauritius to remain a jurisdiction of choice with the highest standards of corporate governance in Africa.

The Code adopt a principles-based, rather than a rules-based, approach that provides organisations with the flexibility to adopt systems and procedures that suit their circumstances. The Code, as far as possible, avoids taking a mandatory or prescriptive approach (since a tick-the-box approach to governance is not recommended). The Code rather employs an "apply-and-explain" methodology, which is a departure from the "comply-or-explain" approach, in that public interest and other entities are now required to apply all the principles contained in the Code and explain in their annual reports how these principles have been applied. The Code applies to all companies (insofar as the principles are applicable to them). For more information on the entities to which the Code applies, please click here.

Rather than being a rigid set of rules, the Code comprises eight principles forming the core of the Code and every board of directors should decide how to apply each principle. Below is an overview of the eight corporate governance principles of the Code. For a full copy of the Code, please click here.

Principle 1 - Governance structure

All organisations should be headed by an effective board. Responsibilities and accountability within the organisation should be clearly identified.

Principle 2 - The structure of the board and its committees

The board should contain independently minded directors. It should include an appropriate combination of executive directors, independent directors and non-independent non-executive directors to prevent an individual or a small group of individuals from dominating the board's decision taking. The board should be of a size and level of diversity commensurate with the sophistication and scale of the organisation. Appropriate board committees may be formed to assist the board in the effective performance of its duties.

Principle 3 - Director appointment procedures

There should be a formal, rigorous and transparent process for the appointment, election, induction and re-election of directors...