In general the existence of a dominant shareholder is seen as potentially negative to the interest of public shareholders says Det Norske Veritas, as this presents challenges in assessing corporate governance. Eagle is owned by Aviva International Holdings Ltd which has a 51% indirect shareholding and NDB Bank is its principal minority shareholder. However “in the case of Eagle the two major shareholder groups have provided stability, strength and depth to the board as well as enhancing both business and governance processes.” says DNV in their Corporate Governance report on Eagle.Det Norske Veritas (DNV), a leader in third party certification and assessment services including Corporate Governance (CG), with a global reputation for excellence is headquartered in Norway and operates in over 100 countries.

To strengthen its Governance practices, and communicate the Company’s compliance and integrity of the governance disclosures to its stakeholder community, Eagle obtained this independent rating. The company considers this step towards obtaining the independent rating of paramount importance, in the absence of adequate mandatory provisions where CG reporting is subject to different interpretations by organizations.

The rating assessment benchmarked the governance framework and practices of the Company against the available local codes and international best practices. The review process evaluated seven key areas;

• Governance policy and business ethics
• Risk Management
• Board and management organization
• Board and Executive compensation
• Ownership structure and control
• Investor rights and relations
• Financial disclosure and audit

In the report DNV states that it is their view that Eagle’s board and management has a sound understanding of good governance practices and is committed to open and ethical business and will strive to improve the Company’s governance practices to further embed these into the organisation. The Board, DNV believes, is committed to governance as a way of enhancing brand value; corporate reputation and shareholder value. Ethical aspects are well addressed and there is a strong emphasis on integrity within the company. Equally, strong risk management, policies and systems are in place and are embedded throughout the company’s operations.

The process DNV adopted to determine the rating included analyzing the preliminary profile of the Company, review of documentation and interviews with the Chairman, Non-executive Directors and members of the senior management.

Eagle has earned a high overall rating of 8 which DNV stated “reflects both the quality of its Board of Directors, the management process and the pro-active approach the company has taken to establish good governance practices.”

DNV was also of the opinion that the Company is transparent in its approach to Board and executive compensation. Overall, Eagle’s position within the Aviva structure and the contribution of NDB has been beneficial to the company and this has been reflected in the score of ‘Ownership structure and control’.

Eagle scored particularly well in the areas of Investor rights and relations and Financial Disclosure and Audit. This, DNV believes gives reasonable comfort to public minority shareholders that in general Eagle is being run transparently and in their interests.

The company believes that responsible and transparent corporate behavior is the foundation upon which stakeholder trust is built and ensures integrity, accountability and transparency. The company has always sought-out local and global best practices on Good Governance and pioneered their adoption in order to enhance their ability to create value and sustainability in stakeholder relationships.

In recognition of Eagle’s commitment to maintaining and enhancing its corporate ethics and good governance practices, Eagle was awarded overall winner of “Corporate Governance Disclosure” for 2006 by the Institute of Chartered Accountants of Sri Lanka.