No. 4/2018 PuBuc El'-<1ITIES CoRPORATE GovERNANCE Cap. 10:31 376. The Board should ensure that compliance is understood to be more than mere observance of laws and regulations but an ethical imperative for the governance oft he company. Compliance with applicable laws must be understood not only in tcm1s of the obligations which the law creates but also in tenns of the rights and protections that it atiords to the company. 377. Information disclosed by the Board about compliance with tlw applicable laws, rules, codes and standards should enable investors and other stakeholders to assess the governance of the company when making investment decisions. Reconzmendations 378. The Board must make adequate and reasonable disclosure about the e:xtent to which the company complies with laws, regulations, non-binding rules, codes and standards and give adequate and verifiable reasons for the extent of any non-compliance. 379. Where the Board delegates its compliance verification function to management or one of its committees, such delegation must be guided by the Board's assessment of the knowledge, etiectiveness and expetience of management or the conunittec to which the t\mction is delegated. 380. The Board should disclose in the integrated report details on how it is discharging its responsibility to ensure efficacious processes and an effective compliance framework. 381. The disclosure of the extent of non-compliance with applicable laws, rules, codes and standards requires the Board to give full, objective and verifiable explanations including(a) whether or not the non-compliance -vvas intermittent or pem1anent throughout the reporting period; (b) whether the company did not comply with some of the provisions of the code and, if so, which ones; (c) the reasons for the non-compliance together •vith a review of those reasons and approval by the company's external auditors and the Board before publication; (d) whether or not compliance with any, and if so which, of the provisions of this Code is mandatory or voluntary f<.x the company's membership of professional bodies or associations and for obtaining business licenses or listing on the Stock Exchange; (e) the risk of non-compliance as identified, assessed and responded to through the company's risk management processes. 382. A company should understand the context of the law within which it does its business and how other applicable laws interact vvith its business. 383. Compliance with applicable laws, rules, codes and standards should be proactively and systematically managed. Compliance issues should be regular items on the agenda of the Board even if this responsibility was delegated to a separate committee or function within the company. 384. The Board has a duty to take the necessary steps to ensure the identification of the laws, rules, codes and standards applicable to the company, its stakeholders and its business. 385. The Board should be informed of applicable laws, rules, codes and standards and any changes to them as part of their induction and ongoing training and education. 386. Management should develop a compliance policy for the approval of the Board and be responsible for implementing the policy and repotting to the Board regarding compliance. 156