Transparency Maldives’s annual Corporate Governance Transparency Index (CGTI) reveals significant deficiencies in State-Owned Enterprises (SOEs) disclosure practices, with only 11 out of 32 assessed SOEs having published their annual reports.
The evaluation was based on the PCB’s Corporate Governance Guidelines and the criteria set under the Access to Information Act. The ratings were determined by examining the information available on social media, media outlets, and company websites.
The rating categories are as follows:
– Fully Observed: 100%
– Excellent: 80% – 99%
– Good: 60% – 79%
– Improvable: 40% – 59%
– Insufficient: 1% – 39%
– Not Observed: 0%
This lack of timely publication impacted the assessment, as many variables requiring disclosure in the annual report could not be evaluated, leading to lower ratings for these enterprises.
The top performers include State Trading Organization (STO) at 67%, Digicel at 66%, Housing Development Finance Corporation (HDFC) and Bank of Maldives (BML) at 63%, Maldives Transport and Contracting Company (MTCC) at 62%, and Maldives Islamic Bank (MIB) at 61%.
Some companies were identified as needing improvement, such as Maldives Tourism Development Corporation (MTDC) at 58%, Housing Development Corporation (HDC) at 53%, Maldives Ports Limited (MPL), and Maldives Marketing and Public Relations Corporation (MMPRC) at 49%, and Male’ Water and Sewerage Company (MWSC) at 45%.
The lowest performers, with a 0% rating due to the absence of a website, were the Maldives Center for Islamic Finance Corporation (MCIF).
Insufficient Website Disclosures:
The 2023 CGTI indicates that the majority of SOEs fall short in disclosing corporate governance mechanisms on their official websites. More than 20 SOEs (63%) scored below 40%, with none scoring over 80% or being rated as excellent or fully observant. Only six SOEs (19%) were rated as good, while five (16%) were rated as improvable. One SOE scored zero due to the absence of a company website.
Pillar 1 – Ownership Policy and Objectives:
Proactive disclosure in this area was deemed good for seven SOEs (22%), while four SOEs (12%) disclosed some information but needed improvement. Twenty SOEs (62%) provided insufficient information.
Pillar 2 – General Disclosure:
The results for this pillar were particularly weak, with 25 SOEs (78%) scoring below 40 and considered insufficient. Six SOEs (19%) were rated as improvable.
Pillar 3 – Engagements with the State:
This pillar, which primarily assesses financial disclosures requiring publication in annual reports, showed that out of the 11 SOEs that had disclosed their annual reports, one SOE’s disclosure was rated good, nine were rated as excellent, and one met the full disclosure requirements for the assessment.
Pillar 4 – Specific Disclosure Category:
This pillar contains only one category, and the required disclosures must be in the annual report.
Pillar 5 – Corporate Responsibility and Internal Controls:
Eighteen SOEs (56%) did not disclose any information under this pillar. Five SOEs (16%) had insufficient disclosures, seven (22%) were rated as improvable, and only two SOEs (6%) scored good in their disclosures concerning corporate responsibility, internal controls, and corporate integrity.
The Corporate Governance Transparency Index (CGTI) is a tool developed by Transparency MV to evaluate the level of disclosure of corporate governance mechanisms in State-Owned Enterprises (SOEs). The framework is based on international best practices and assesses 38 variables against six indicators: quality of information, accessibility, reliability, completeness, and timeliness.
