STRATEGY CONVERSATION IN THE BOARDROOM: ROLE OF THE INDEPENDENT DIRECTOR

CONTENTS02

GROWTH DYNAMIC HARNESSINGTHE POTENTIAL OF WOMEN

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KPMG HOSTS THE 19TH AUDIT COMMITTEE FORUMON KEY AUDIT MATTERS

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SEEKING A GLOBAL APPROACH TO TRANSFER PRICING10

EFFECTIVE GOVERNANCE TIPSCYBERSECURITY AND THE BOARD OF DIRECTORS

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ENHANCE YOUR SKILLS AND BE MORE EFFECTIVEIN THE BOARDROOM

11

ASK THE SLID GURU14

NEW MEMBERS16

HARVARD MANAGEMENT TIPS17

NEWS FROM THE SECRETARIAT19

OFFICE BEARERSAND COUNCIL

SLID OFFICENo. 434, R. A. De Mel Mawatha,Colombo 03.

Telephone: 2301646 - 8

EDITOR: Rasakantha RasiahPRINTED BY: Sanvin (Pvt) Ltd.ART DIRECTOR: Dharshan Senanayake

Email: iod@slid.lk. info@slid.lk

Web: www.slid.lk

Chairman

Senior Vice Chairman

Vice Chairperson

Immediate Past Chairman

Council

CEO SLID

Past Chairmen

1 Mr. Rasakantha Rasiah

2 Mr. Faizal Salieh

3 Ms. Aroshi Nanayakkara

4 Mr. Preethi Jayawardena

5 Mr. Dinesh Weerakkody6 Mr. Prakash Schaffter7 Mr. Vish Govindasamy8 Mr. Dilshan Rodrigo9 Ms. Nadija Tambiah10 Ms. Samadanie Kiriwandeniya

11 Ms. Chamindã de Silva

Desh. Ken Balendra - Founder President (2000 - 02)

Mr. Ronnie Peiris - President/Chairman (2011-13)Mr. Pravir Samarasinghe - Chairman (2013-15)Ms. Shiromal Cooray - Chairperson (2015-17)Mr. Preethi Jayawardena - Chairman (2017-19)

Mr. Richard Juriansz - President (2004 - 07)Ms. Marina Tharmaratnam - President (2007 - 09)Mr. Mahen Dayananda - President (2009 - 11)

Mr. Ranjit Fernando - President (2002 - 04)

The role of the independent non-ex-ecutive director (INED) in the strategy conversation in the Boardroom featured as the discussion topic at a recent session of the Sri Lanka Institute of Directors (SLID) INED Forum held at the SEC Auditorium. The session was chaired by Faizal Salieh, Forum Chairman and SLID’s Senior Vice Chairman, with Vijaya Malalasekera, Chairman, Bogala Graphite Lanka PLC, Murtaza Esufal-ly, Director, Hemas Holdings PLC and Anushka Wijesinha, Seylan Bank PLC as the panelists, and Hiranthi Fonseka, Partner, Ernst and Young as the key note presenter who set the tone for the discussion.

Time is one of the biggest obstacles for an INED in the Board’s oversight role. A Board may typically meet 6 – 8 times a year, with an agenda that is packed with on-going business battles, compliance issues and finan-cial reporting matters. This leaves little time for deliberation on strategy, its execution, and more importantly, its validity.

Does the INED receive information for evaluation in a manner that enables such contribution. For exam-ple, if the Board spends half the time allocated for oversight of strategy on deliberating on the credibility of infor-mation, or understanding the informa-tion presented, the task of overseeing becomes even challenging.

The Board’s composition also has a significant impact on the oversight of strategy. Whilst the CEO and execu-tive directors involved in the execu-tion of the strategy, the INED’s contribution brings independence, fresh thinking, and the right amount of scepticism into the discussion of strategy and its execution in the Boardroom. The INEDs must have the right mindsets, be prepared to ask pertinent questions and challenge the strategy propositions put forward by the executive man-agement of the company. Depend-ing on the complexity of the organi-zation, the Board may also need to consider creating a dedicated Board sub-committee on Strategy It is a common practice for companies to have the senior executive manage-ment headed by the CEO to execute the strategy. However, strategy needs to be reviewed and invigorat-ed in a timely manner for a company to succeed. This is where the INEDs can provide fresh thinking in an independent manner for the long term sustainability of the company.

The panelists shared their own experiences and views on the subject and noted that the compa-ny’s risk management process should assess all the business risks of the company and the role of INEDs is important in the Board’s deliberations on the risk agenda at Board meetings.

The alignment of the company’s systems, processes and people to the strategy should be a matter for Board focus in order to minimise the execution gaps. Misalignments result in failure in the execution of strategy. The forum discussed the usefulness of appointing an INED as the Chair of the Board Strategy Committee and the Risk Manage ment Committee.

STRATEGY CONVERSATION IN THEBOARDROOM: ROLE OF THEINDEPENDENT DIRECTOR

INEDForum

02

Silver Partner Event Partner Beverage PartnerExclusive Print Media Partner Hospitality Partner

The Women Directors Forum (WDF) of the Sri Lankan Institute of Directors (SLID) presented a Power Evening titled ‘Growth Dynamic: Harnessing the potential of women’ on 8 August 2019 with keynote address by Mr. Carl Cruz, Chairman, Unilever Sri Lanka followed by an interactive panel discussion with corporate leaders Mr. Mahendra Amarasuriya (Chairman Equity Investments Lanka Ltd., Former Chairman Commercial Bank) and Ms. Shea Wickramasingha (Group Managing Director, Ceylon Biscuits Limited).

The evening session commenced with Mr. Rasakantha Rasiah, SLID Chairman welcoming the partici-pants with a brief introduction to SLID followed by a synopsis of the work that SLID has done in the sphere of Women on Boards and the flagship programme Board Leadership Director Certification.

The Power Evening, a part of a SLID series of evening events, was a call to action on achieving business success in today’s changing world through the use of diverse talent. In particular, harnessing the knowledge and skills of women who comprise the majority of consumers by getting more women to participate in management and on boards and the importance of building

GROWTH DYNAMIC HARNESSING THE POTENTIAL OF WOMEN:

MOVING FROM AWARENESS TO IMPLEMENTATION

04

“If you want your company to be successful;if you want your company to operate with wisdom, with care,

then women are the best”

Jack Ma – Executive Chairman, Alibaba

a leadership pipeline of women who are equipped and ready to tackle future challenges.

Mr. Cruz shared his personal experi-ences in moving from awareness to implementation of gender balance throughout Unilever, globally and locally. Unilever’s global strategy is to improve the representation of women in management, with a goal of gender balance, inclusion of disabled and LGBT+ employees involves a myriad of activities through their Diversity and Inclusion programme including, agile working and flexi-working opportuni-ties, career breaks, 6 months materni-ty and 3 weeks paternity leave (which leads to 100% maternity return rate), un-stereotyping the workplace and, reverse mentoring programme where Mr. Cruz regularly meets the younger employees where he is challenged and learns from them.

The keynote address was followed by an interactive panel discussion moder-ated by Ms. Aroshi Nanayakkara with panelists Mr. Mahendra Amarasuriya,

Ms. Shea Wickramasingha and Mr. Carl Cruz at which some pertinent thoughts were shared.

Ms. Nanayakkara wrapped the panel discussion with thanking the working committee of the Women Directors Forum which has a dynamic group of women, Nadija Tambiah, Janaki Kuruppu, Gayani De Alwis, Ranjani Joseph and Malika Wijeratne. She shared that other activities of the WDF will include encouragement of male champions, specialized training and mentoring programme to build a pipeline of Board ready women. Phase 2 will be to take this message to the Universities, to the bottom of the tier to prevent people from dropping out of the work force.

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The 19th edition of the Audit Commit-tee Forum hosted by KPMG focused on discussing the impact of Key Audit Matters (KAMs) reported in the auditor’s report. This was considered groundbreaking as for the first time, there is transparency in the most important audit issues that were discussed between the audit engage-ment partner and the audit committee, which are reflected on the audit report.

The Forum was organized to discuss “Key Audit Matters and the role Board Audit Committees can play”. Because, now investors would receive more contextual information about the audit that would help them differentiate better between companies that had received ‘clean’ audit reports. There-fore, audit committees felt they have to play a key role in the disclosures made under KAMs by auditors.

Improved GovernanceUnder the sub topic of “How KAMs contribute to improved governance?,” Mr Rajakarier presenting views of Mr Lalit Wijeyeratne (Non Ex Director) noted that overall KAMs are valuable to shareholders , investors and other stakeholders to get a better under-standing of the company’s business environment and its risk profile. It also

improved dialogue between BODs, BACs (Board Audit Committee) and the Auditor. KAMs also leads to better Board focus on Governance issues i.e ,effectiveness of internal controls ,intro-duction of performance measures, effectiveness of oversight committees. At the same time Auditors are exposed to report in the manner in which the KAMs have been dealt with. Leading to improvement in –Audit quality.

What is a KAMMr. Fernando sharing his view on why a risk would be identified as a KAM stated that KAMs are highlighted based on the Auditor’s professional judgement and the factors that the auditor takes into consideration are the significance of events during the year, risk associated, size of accounting balance and matters where significant auditor judgement was required on estimates/other transactions. He highlighted that in determining KAMs, auditors adopt a 3-tiered filtration process comprising (1) Matters communicated to those charged with governance (2) Matters that require significant auditor attention (3) Key audit maters. It was noted that key audit matters are selected from matters communicated with those charged with governance.

Managing KAMsMr. Soosaipillai then shared his views on how the BAC can manage the process for KAMs. He stated that a proactive approach needs to be used in the process and should begin as early as possible. The BAC should carefully examine the audit plan includ-ing possible reporting risks which could be the first flags of possible KAMs. Further, the BAC should request for an interim issues memorandum from the auditors before the year end to have a better understanding of KAMs.

Responsibility of BACMr Ebell discussed; “Responsibility of the BAC in accepting assumptions/-judgements made by management/ex-ternal consultants and valuers” He stated BACs should identify significant judgements/assumptions made includ-ing the effective useful lives of PPE, property valuations, fair value valua-tions and loan impairment provisioning and advise the Board accordingly. With regards to valuations, the qualifications and credentials of the valuers should be considered, in addition to close auditor participation and management interaction. He also noted, key challenges such as future cash-flow based valuations, deferred tax provi-sions, assessment of intangibles and

KPMG HOSTS THE 19TH AUDIT COMMITTEE FORUMON KEY AUDIT MATTERS

The panelists for the evening were (left to right in the photo): Mr. D. Soosaipillai (Non-Executive Director HNB and Commercial Credit), Mr. Sanath Fernando (Partner – Ernst & Young), Mr. Suren Rajakarier (Partner - KPMG), Ms. Ranjani Joseph (Partner KPMG) and Mr. Richard Ebell (Non-Executive Director – Cargills Bank),

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impairment provisioning which may require some expert guidance. He was of the view, the BACs should question and challenge both internal and expert assumptions.

Common KAMsMs. Ranjani Joseph presented the types of KAMs that were presented globally and locally. KPMG had reviewed 128 audit reports of listed companies and identified the top 5 KAMs as Goodwill, revenue, invento-ry, taxation and acquisitions. She pointed out that the main reason behind these common KAMS would be due to fair value estimations, signif-icant audit effort and risk. Revenue is generally considered as a key measure of performance and is impacted by SLFRS15, thus being a common KAM among entities. Inven-tory is also considered as a KAM due to the macro trend of uncertainty in consumer preferences leading to obsolescence of inventory held.

The panel discussion moderated by Mr Suren Rajakarier, was interactive and agreed that reporting of KAMs has contributed to a general improvement of governance.

integrity of financial statements and therefore, it must identify significant judgments / assumptions made, and seek to validate them.

The Forum which operates under the aegis of the Sri Lanka Institute of Directors has been supported and enabled since inception by KPMG, in line with its globally recognized Audit Committee Institute initiative. Suren Rajakarier facilitates these sessions using appropriate KPMG thought leadership during the sessions and moderates the discussions. These discussions have contributed to improving governance and better audit committee practices by its members, thereby increasing confi-dence in the capital market.

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There is, so far, no evidence of KAMs being used defensively to reduce the auditor’s liability but it has improved audit quality too. The Forum believes, it’s reasonable to expect the users’ assessment of an entity’s economic situation to be more negative if the auditor’s report includes a KAM section with a rather negative tenden-cy as compared to a KAM section with a rather positive tendency. Therefore, the BAC should take early note of such instances and judicious-ly reduce any negative effects. Also, fair value determination based on future cash flows or market value based on SLFRS 13 basis is complex and susceptible to manipulation.

The BAC advises the Board on the

Recognising the importance of Audit Committees as part of good Corpo-rate Governance, a few like-minded Company Directors took the initia-tive in mid-2014 to set up the Audit Committee Forum, to help Audit Committees in Sri Lanka improve their effectiveness.

The Forum provides opportunities for members to keep abreast of the latest legislative and regulatory requirements. It seeks to provide best practice guidance to enable them carry out their responsibilities effectively, through expert inputs and discussion. To this end, it acts as a resource to which they can turn for information, knowledge and experience.

shared across a broader spectrum.

Membership is free and SLID will accept and process your member-ship requests. If interested in joining please send an email to ceo@slid.lk

KPMG has provided very valuable support to the Forum, not least through Suren Rajakarier, Head of Audit, who serves as its moderator.

For Chartered Accountants, atten-dance at sessions gives the benefit of CPD hours recognized by CASL.

Every session of the Forum (held quarterly) deals with a topic or topics to support its objectives. Session topics have ranged from the Role & Responsibilities of the Audit Commit-tee, to Fraud, Internal Control lapses, and Cybersecurity. Resource persons make presentations followed by interactive panel discussions.

Currently, the Forum has a member-ship of over fifty from diverse profes-sional backgrounds with significant experience in both the private and the public sectors.The Forum welcomes Board Directors, Audit Committee members and those who play like roles in organisations in the private and public sector to join so knowledge and experience can be

ABOUT THE AUDIT COMMITTEE FORUM

SEEKING A GLOBAL APPROACH TO TRANSFER PRICING

Initially, not taken seriously, the Government has now in place a compre-hensive Transfer Pricing (TP) regime, which includes the imposition of penalties when and where needed within the Tax System. This compels a taxpayer to carry out transactions between Associated Enterprises (AEs) on an arm’s length basis, mandating them to report transactions with AEs as part of their annual tax filing. It is also important to high-light, the following key provisions relating to TP, which were included in the Inland Revenue Act, No. 24 of 2017 (IRA) together with the TP regulations.

The requirement to prepare and maintain three-tiered documentation structure, comprising a local file, master file and the Country-by-Country (CbC) report;

New parameters for determining the AE relationship;

Prohibition of corresponding adjustments for domestic transactions;

Introduction of new rules on thin capitalization;

Introduction of a new penalty regime;

However, the Government has also taken steps to simplify the TP regime by providing relief in relation to the application of TP regulations for specified domestic transactions. Further, it has enhanced the Dispute Resolution Mechanism and allows a taxpayer to approach the Dispute Resolution Panel when an interim order is issued by the Tax Review Committee. Most importantly, the Government has limited the statute of limitation for TP assessments to 30 months from the date of filing the annual Return of Income.

The above provisions broadly reflect Sri Lanka’s commitment to imple-ment the new international standards set by the Base Erosion and Profit Shifting (BEPS) project carried out by the Organization for Economic Cooperation and Development (OECD). Sri Lanka became a BEPS member, committing to implement specific minimum standards of the BEPS project. Minimum standards are the BEPS recommendation to all members of the Inclusive Framework on BEPS have committed to implement. These relate to some of the elements of Action 5 on harmful tax practices, Action 6 on treaty abuse, Action 13 on TP documentation and CbC reporting and Action 14 on dispute resolution.

The BEPS members now span over 132 jurisdictions, representing approximately 96% of the global gross domestic product.

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Value creation is something many taxpayers had not historically dedicat-ed significant time and attention to – particularly in the context where one sided method is chosen as the most appropriate method. In a post-BEPS world, the requirement to understand how value is generated by the group as a whole, the inter-dependencies of the functions performed by the AEs with the rest of the group, the contribution that the AEs make to that value creation, the allocation of risks and assets etc. necessitate a coordinated, consistent and well executed response from decision makers of the group at the highest levels. The assessment of value creation can be more complex than it initially appears to be, since there is less guidance or precedence in this area.

Undoubtedly, the BEPS project is the

most ambitious international tax

policy initiative ever undertaken.

When the BEPS project was started,

the OECD estimated that the cost of

tax avoidance was between USD 100

billion to USD 240 billion per year. As

a result, the BEPS project was

designed to stop multinational

enterprises from competing on the

basis of a lack of transparency,

artificially shifting profit to countries

where there is little or no economic

activity, or the exploitation of

loopholes or differences in countries’

tax systems. The final reports, issued

on 5 October 2015 with 15 action

items, represent a package of

measures that governments should

implement to challenge the unfair

profit shifting. The 15 BEPS actions

equip governments instruments to

address tax avoidance and ensure

that profits are taxed where economic

activities generating the profits are

performed and where value is created. CONCLUDING REMARKS

Recent surveys indicate that a Com-pany’s ability to attract capital at a favourable cost is a direct factor of the standard of the Corporate Gover-nance employed, and exhibited, by it. There is a growing impetus to improve standards of individual directors and boardroom perfor-mance through education, certifica-tion and evaluation, all of which the Sri Lanka Institute of Directors (SLID) is well geared to deliver.

The SLID flagship Board Leadership Director Certification Programme (BLT) targets current, aspiring and

potential directors. This programme is geared to making directors more effective by gaining greater under-standing of the entire range of duties and responsibilities that go with their role whilst enhancing board perfor-mance and decision making.

The BLT Programme was developed as an international class Training Resource Kit by SLID through materi-al developed by the International Finance Corporation through its Global Corporate Governance Forum. The programme is accredited by the Securities and Exchange Commission (SEC) and extensively customized by SLID to meet Sri Lankan requirements.

The SLID faculty comprises of senior directors, who have the knowledge base, experience and skills to lead director education programmes. They enrich the programme by shar-ing their practical experience and real life examples which cannot be

obtained from textbooks. This is programme has received since its start where over 95 per cent of partic-ipants have rated the programme 4 and above (where 1 is the lowest and 5 the highest in the rating scale). Included in the SLID faculty are certified IFC Corporate Governance Board Leadership trainers.

This programme is conducted twice a year to accommodate the demand. The 10th intake will commence in February 2020. Contact Rashmi on 2301646 for more information or to register.

ENHANCE YOURSKILLS AND BEMORE EFFECTIVEIN THEBOARDROOM

The accurate identification of AE relationships is imperative as it is the first step in meeting the compliance burden placed on the taxpayer. Also, with respect to economic analysis, the obligation, in principle, applies on a transac-tion-by-transaction basis, meaning that the analysis has to be carried out for every single AE transaction. Thus, it is important that the taxpayer determine transfer prices on a realistic and acceptable basis. While maintaining documenta-tion by the due date remains important, the TP regulations require a more holistic approach including consideration of other developments in the BEPS action plan. This will no doubt impose a heavy administrative burden on a taxpayer, which can be exacerbated by transparency and information sharing provisions of the BEPS project.

That being said, it is recognized that the IRA together with the TP regulations empowers the Inland Revenue Depart-ment (IRD) to challenge TP arrangements of a taxpayer focusing on both pricing and the constitution of the economic substance in the value chain. The introduction of the penalty regime for TP purposes has further demanded the need to achieve high levels of tax equity and compliance in relation to AE transactions by a taxpayer. A Taxpayer should therefore, carefully take into consideration the TP regulations and content requirements specified from a Sri Lankan perspective, prior to filing their TP documentation with the IRD. Failure to comply with the TP regulations may result in the assessment of penalties, which may far exceed the cost of compliance.

This article was contributed by Mr. Hasitha Raddella, Senior Director in EY’s Transfer Pricing Practice in Sri Lanka.

ROSHINI FERNANDOPARTNERERNST & YOUNG

HASITHA RADDELLASENIOR DIRECTORERNST & YOUNG

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“A primary responsibility of every board of directors is to secure the future of the organization. The very survival of the organization depends on the ability of the Board and Management not only to cope with future events but to anticipate the impact those events will have on both the

company and the industry as a whole.”Tom Horton (author Directors & Boards)

Directors need to understand and approach cybersecurity as an enter-prise-wide risk management issue, not just an IT issue.

Directors should understand the legal and regulatory implications of cyber risks as they relate to their company’s specific circumstances.

Boards should have adequate access to cybersecurity expertise, and discussions about cyber-risk management should be given regu-lar and adequate time on the Board meeting agenda.

Directors should set the expectation that man-agement will establish an enterprise-wide risk management framework with adequate staffing and budget. Organizations - regardless of size, degree of cybersecurity risk or cybersecurity sophistication - should apply principles and best practices of risk management to improving the security and resilience of critical infrastructure.

Board-management discussion of cyber risk should include identification of which risks to avoid, accept, mitigate, or transfer through insurance, as well as specific plans associated with each approach. Effectively managing cybersecurity risk requires an understanding of the relative significance of organizational assets in order to determine the frequency by which they will be scrutinized for risk exposures. This is no small task. It takes considerable thought and effort, along with a great deal of cybersecurity expertise.

Cyber threats are daunting. They are complex and constantly evolving, and have the potential to impart significant financial and reputational damage to an organization. Furthermore, there’s no way to be 100% protected. That’s why cybersecurity is no longer just the responsibility of IT departments. Boards of Directors are ultimately liable and respon-sible for the survival of their organizations, and in today’s interconnected world, cyber resilience is big part of that responsibility. That means that Boards must take an active role in cybersecurity.

Effective GOVERNANCE TipsCYBERSECURITY AND THE BOARD OF DIRECTORS

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Ask the

guruSLID

What are the features of new Audit Reporting- Key Audit Matters and their benefits to users of audit reports?

1. Features of the new audit reporta. The Report will start with the Opinion para i. Unlike the old format where the opinion was towards the end. This is to clearly communicate the nature of the opin-ion to the Shareholders

b. Key Audit matters i. Description of the areas which involves significant risks, Judgement, estimates or any significant events / transactions

How can Board Remuneration Committee Members add value to organisations that are primarily controlled by one or two large shareholders? In such instances most of the KMP are personally obliged to the Directors and reporting lines appointed by these shareholders.

The Remuneration Committee of quoted companies is a key feature of moderating the control of boards by a single or group of persons. Please refer Code of Best Practice on Corporate Governance recommended by the SEC and ICASL in 2013 which contains the ideal composition and terms of reference of a Remuneration Committee. With a recommended majority of independent directors and chaired by an independent director, the remuneration committee is responsible for the remuneration, incentive framework, evaluating performance of key management personnel. The composition and functioning of a Remuneration Committee in the manner recommended by the Code of Best Practice should prevent control of KMPs by dominant shareholders.

Consider a public quoted company having one shareholder with 45% and the other shares among many. Can the majority shareholder (i.e. one holding 45 % shares) dictate policy terms like Procurement, Retirement age, and remuneration for employees?

Many measures have been taken by the SEC to prevent the control of boards by a single person. This includes the mandatory appointment of Non-Executive and independent directors (INED) and delegation of certain duties to expert board committees such as a remuneration committee. All Directors sitting on quoted company boards are required to exercise independent judgement and according to the laws of the land. Exercise of these functions in the correct manner by Non-Executive and Independent Directors is key to healthy board functioning.

The remuneration committee which is mandatory for all listed companies (Rule 7.10.5 CSE Listing Rules) is required to comprise a majority of INEDs. Best practice suggests that the Remuneration Committee be chaired by an INED. It is the Remuneration Committee which should look at the remuneration of senior employees. The Code of Best Prac-tice on Corporate Governance recommended by the SEC and ICASL in 2013 contains as Schedule C – the Terms of Reference for a Remuneration Committee which covers many of the items listed in the question

2. Benefits of KAMs a. Reporting KAMs in the auditors’ report opens up transparency on the audit process relating to the audi-tor’s professional judgment, as there is a growing demand on transparency by the investors in the audit process.

b. It helps in understanding the areas where manage-ment has made of crucial judgment and estimates in audited financial statements.

c. Communicating key audit matters helps better com-munication between the auditors and those charged with governance, this in turn contributes to better governance.

d. KAMs give preparers incentives to revisit financial reporting and disclosures in areas related to those KAMs; this in turn contributes to higher quality financial reporting.

ii. How management had addressed these aspects iii. The procedures followed by the auditors

c. Other information i. Auditor has to expressly state whether the informa-tion is consistent of the auditor’s understanding of the reporting entity

Ask the

guruSLID

Ask the

guruSLID

The information on SLID Guru is a personal opinion offered as a public service and is not intended to be and should not be considered legal advice

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Mohommed Kamal JaimonExecutive DirectorPerera & Sons Bakers Pvt Limited

Anoma De SilvaDirector – Human ResourcesAnsell

Dhanushka FernandoDirectorFinez Furniture & Interior PVT LTD

Pradip Elmo FrancisFounderDiscover

Manoj GuptaManaging DirectorLanka IOC PLC

Ashani Manjula JayasingheChief Executive OfficerGIS Solutions (PVT) LTD

Santhosh MenonChairman / CEOKaleidoscope PVT LTD

Rohan Philip BuultjensChief Technology & Digital OfficerHatton National Bank PLC

Dayanthi Lakshmi Panabokke DirectorMahaweli Reach Hotels PLC

George Brian GoudianPrincipalErnst & Young

Iresha SoysaManaging DirectorBDO Corporate Services (Private) Limited

Jude Rajith PereraPrincipalErnst & Young

Lilanthi Champika HerathDirector / ConsultantHanshin Lanka (PVT) LTD

Rajeev Harindra De SilvaPartnerErnst & Young

Ransith Nishantha KarunaratneDirector / Chief Executive OfficerUB Finance Co. Ltd

Nadarajah ParaneetharanFinancial Specialist Peace Corp Sri Lanka

Priyantha ThalwatteDeputy Chief Executive OfficerNations Trust Bank PLC

Tamara Astrid BernardAssistant General Manager (Corporate & Investment Banking)Commercial Bank of Ceylon PLC

Sahan Prasanna JayasingheCountry DirectorHellmann Worldwide Logistics (Pvt) Ltd

Ashane Joseph Waas JayasekaraDeputy Managing PartnerBDO Partners

Mohamed Nabeel NawabdeenPartnerBDO Partners

Vasantha Kumar RasarathinamPartnerBDO Partners

Fathima Sarah Zainul AfkerPartnerBDO Partners

Henush Sasanka RathnaweeraPartnerBDO Partners

NEW MEMBERS

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NEW MEMBERS

Agnes Renuka MarshallManaging DirectorThompson Associates (Ceylon) PVT Ltd

Graham MarshallDirectorThompson Associates (Ceylon) PVT Ltd

Nilufer Deepani AbeysingheDirectorSalota International private Limited

Kolitha WickramasingheManaging DirectorSalota International Private Limited

Privately held family businesses have a lot of freedom to define success. Yet many founders and owners aren’t clear about exactly what they want their company to achieve, which leads to conflicting priorities and unclear decision making. Ask yourself whether you are most interested in growth (maximizing the financial value of the business), liquidity (generating cash flow for use outside of the business), or control (retaining decision-making authority). Achieving all three goals is difficult, if not impossible, so you’re better off focusing on one or two. Think carefully about why you started the company and which of the three goals are most aligned with your objectives. And don’t forget to revisit your choices as things change, whether they’re external factors like the economy or internal factors like a shift in senior management. What worked well in one environment can be a disaster in another.

Source: The Management Tip of the Day from Harvard Business Review, September 27, 2019

Adapted from “Every Business Owner Should Define What Success Looks Like,” by Josh Baron and Vlad Barbieri

FAMILY BUSINESSES HAVE TO DEFINE WHATSUCCESS LOOKS LIKE

HARVARD MANAGEMENT TIPS

Waiting too long to make decisions can slow down companies, frustrate employees, and lead to missed opportunities. But it can be hard to know whether you should just go ahead and choose or gather more data first. In these situations, consider two factors. First, how important is the decision? When it’s of little consequence, pick something and move on. When it’s truly important, reflecting more or gathering additional information is probably a good idea. Second, how often will that particular decision be made? If it will happen often — maybe it’s about pricing, inventory, or hiring — it may be worth developing a systematic approach. Doing so will take time now, but you’ll save time when the decision comes up again. And if you’re still struggling, give yourself a deadline, which can be a helpful way to constrain your process. (You may not have time to gather more data, for example.) Once you’ve made the decision, analyze the process you used so that you can improve it next time.

Source: The Management Tip of the Day from Harvard Business Review, September 11, 2019

Adapted from “When to Stop Deliberating and Just Make a Decision,” by Thomas H. Davenport

IS IT TIME TO STOP DELIBERATING ANDJUST MAKE A DECISION?

NEWS FROM THE SECRETARIAT

SAVE PAPER - DIGITAL COPY OF THE MAGAZINEFrom this issue onwards you will receive a digital copy of the magazine via email. If you would like to continue receiving a paper copy send an email to ops@slid.lk and let us know.

October 07 Power Evening: INED Forum presents ‘Lessons from failed Companies’

November 08 Annual Directors’ Dinner 2019 ‘Spellbinders’

SLID CALENDAR OCTOBER – DECEMBER 2019

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SLID NOW OFFERS AN ADVISORY SERVICE FOR MEMBERSWith a view to enhancing membership value, SLID now offers its members a free, independent and confidential advisory service on difficult issues members may encounter in the practice of their role as company directors. These advisory services are not meant to replace professional legal advice but will serve as a first point for preliminary discussion on issues. Assistance will be limited to current members only.

A member may contact SLID CEO via email ceo@slid.lk with the information required that will assist SLID in providing a panellist(s) with the relevant expertise to discuss the issue raised.

For more information please contact SLID CEO on 2301647.

ADVOCACY: SLID RESPONDS TO THE SEC PUBLIC CONSULTATION 2019/01 In July 2019, the Securities and Exchange Commission of Sri Lanka requested for comments on the “Segregation of Chief Executive Officer and Chairman Role, Performed by One Individual in Listed Entities” to which SLID submitted its response.

CHANGES AT THE SECRETARIAT Whilst we bade farewell to Marina Hanan, Executive Assistant Administration, in July 2019 we welcomed Seshan Bernard in August 2019 as the Junior Executive Finance and Administration. We look forward to his positive contribution to the SLID and wish him all the best in his new role.

ANNUAL MEMBERSHIP SUBSCRIPTION 2019/20 OUTSTANDINGThe Annual membership subscription cycle for Ordinary, Associate, Retired, and Affiliate members is from 1 April. Your invoice for the period 01 April 2019 to 31 March 2020 has been forwarded to you and payment received by 15 May 2019.

If you have paid your dues for the year thank you. If you have not, we would have communicated this to you and appreciate it if you could pay your outstanding as soon as possible via the secure payment gateway on our website www.slid.lk. (Please add the convenience fee of Rs. 250 to your invoiced amount when making a payment via our website). For other payment options please contact the Secretariat on 112301648.

KEEP US INFORMED IF YOUR DETAILS HAVE CHANGEDHave you changed your details such as Directorship, company, job, or changed addresses?Help us make sure SLID communications reach you by keeping us updated with your current contact details. If the details we hold on you are out of date, you may miss out on important information and opportunities.

WHAT INFORMATION DO YOU NEED TO UPDATE?The information we hold includes your name, designation and company. Your home and company addresses, your home or mobile phone number and your alternative email address are all important for us to be able to contact you. You can update your details at any time by emailing your new details to ops@slid.lk or by calling the Secretariat on 2575295.

First time ever a SriLankan Company received Packaging Award at World Packaging Organization 2019

JFPACKAGING LIMITED“Flexible Packaging Beyond Expectations”

Registered O�ce :No. 98, Sri Sangaraja Mawatha,Colombo 10, Sri Lanka.Tel: +94 11 7766000

Email: info@jfpackaging.lk

Business O�ce :No. 306, Minuwangoda Road,Kotugoda, Sri Lanka.Tel: +94 11 2233214Fax : +94 11 4868962Web : www.jfpackaging.lk

WORLD STAR AWARD WINNER 2019WORLD STAR PACKAGING EXCELLENCE AWARD

WORLD STAR PRESIDENT AWARDWORLD STAR BRONZE AWARD

ASIA STAR AWARD WINNER 2017

5 A S IA S T A R A W A RD S

LANKA STAR AWARD WINNER 2018LANKA STAR PRESIDENT AWARDLANKA STAR PLATINUM AWARD

LANKA STAR SPECIAL AWARD

2 GOLD AWARDS 20184 SILVER AWARDS 2018

2 BRONZE AWARDS 2018

LANKA STAR AWARD WINNER 2017

2 GOLD AWARDS 2017

3 SILVER AWARDS 2017

LANKA STAR AWARD WINNER 2016 & PRIOR