Namibia Financial Institutions Supervisory Authority issues governance standard for financial markets entities with one third independent directors and auditor rotation

The Namibia Financial Institutions Supervisory Authority has issued a governance standard for all financial markets regulated entities registered under Chapter 3 of the Financial Institutions and Markets Act, 2021, including exchanges, central securities depositories, investment managers, securities dealers, advisers and stockbrokers. The standard sets board-led requirements across ethical leadership, board composition, conflicts of interest, strategy, internal controls, risk management, stakeholder communications, information technology governance and disclosure, and makes clear that boards retain ultimate responsibility even where functions are delegated or outsourced. Key requirements include a board made up of executive, non-executive and independent directors, with one-third of members independent, and an independent chairperson. The standard also requires formal and transparent director appointments, a qualified company secretary, induction and ongoing training for directors, annual evaluations of the board, committees and principal officer, and conflict reporting by board members, employees, auditors and third-party service providers. To support independence, non-executive directors are limited to three consecutive terms of up to three years each, followed by a three-year cooling-off period, while auditors may serve no more than five consecutive years unless the regulator approves otherwise and must then observe a three-year gap before reappointment. Boards must maintain governance and risk policies, review whether an internal audit function is warranted, oversee outsourced arrangements, keep a risk register and ensure effective oversight of information technology risks and controls. The standard provides that NAMFISA may take enforcement action under Part 6 of Chapter 10 of the Act for non-compliance.