 The role of the owner is critical in the governance of companies and more so for the companies that are publicly owned. As the DHI Portfolio Companies contribute greatly to the growth and sustained success of business and industry in Bhutan and provide critical services to the general public, it is imperative that their ownership be exercised for sustained societal value, as well as for maintaining their commercial competitiveness in the country and the region. Towards this end, the Druk Holding and Investments developed the DHI Ownership Policy 2010 to provide an overall framework for the governanceof the companies under its ownership. The dossier addresses some of the important issues that have emerged over the last four years of DHI’s formation, most of which relate to the dynamics of interface between the government, DHI, and the companies; the roles and responsibilities of the company boards, chairpersons, and CEOs; and their appointments and terms of reference. In a nutshell, the policy intends to ensure the greatest possible value creation over time in the best interests of the shareholders, employees, and other stakeholders.
Subsequently and as per the requirements of the DHI Ownership Policy 2010, DHI developed the Board Performance Evaluation and Performance Evaluation of CEOs for its owned and controlled companies. Both documents were developed based on international best corporate governance practices and will come into effect from January 01, 2011.
Upon establishment, DHI also introduced the Compact system and has since been signing Compacts with its fully owned companies, including the Bank of Bhutan Ltd. The Compact Guidelines for DHI Companies 2009 aims to enhance overall company performance by providing tools for setting annual performance targets, reviewing and evaluating performance, and linking performance to corporate incentives. Each year, DHI conducts orientation programs for the new DHI-appointed board directors and the new CEOs of its portfolio companies to acquaint them with the corporate governance systems described herein.
Looking forward to 2011, DHI plans to continue with its corporate governance initiatives, but with special emphasis on the training of board directors, performance benchmarking and monitoring, and creating awareness of corporate governance both within and outside its group of companies.
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