Corporate Governance in Papua New Guinea
Overview
Corporate governance in Papua New Guinea is based on company legislation, capital-market regulation, and sector-specific prudential requirements. The framework combines statutory duties applicable to companies and directors with a more developed governance regime for publicly listed issuers and regulated financial institutions. The Securities Commission of Papua New Guinea has a specific statutory role in promoting and enforcing corporate governance standards in the capital market, while the Investment Promotion Authority administers the principal company legislation.
The Companies Act provides the general legal foundation for corporate governance. It establishes the framework for companies, directors, shareholders, company administration, financial reporting, and corporate accountability. The statutory framework is supplemented by securities legislation governing the capital market and by the rules applicable to companies listed on PNGX.
Several key elements shape corporate governance in Papua New Guinea:
- board accountability and effective corporate oversight
- protection of shareholder rights
- clear division between board and executive responsibilities
- director independence and appropriate board composition
- transparency and continuous disclosure
- ethical conduct and management of conflicts of interest
- internal control, audit, and risk management
- accountability to shareholders and other material stakeholders
The board of directors is central to the governance structure. Directors are responsible for overseeing the company's affairs, providing strategic direction, supervising executive management, and ensuring that appropriate systems of control and risk oversight are maintained. The governance framework places particular importance on directors exercising independent judgment and acting in the interests of the company.
The Securities Commission has an important role in the development and supervision of corporate governance in Papua New Guinea's capital market. Its statutory functions include preparing and publishing corporate governance standards for companies registered in Papua New Guinea, including public and exempted companies, and promoting high standards of corporate governance among publicly listed companies and market intermediaries.
Papua New Guinea has a dedicated corporate governance framework for companies listed on PNGX. The current framework, introduced in July 2023, applies specifically to listed issuers and uses an "if not, why not" or "apply or explain" methodology. Listed companies are required to report against the applicable governance standards and explain where a recommendation is not followed.
The listed-company framework places substantial emphasis on board effectiveness and the division of responsibilities. It addresses the separation of the Chair and Chief Executive Officer, independent and non-executive directors, board balance, nomination and succession processes, board performance evaluation, director and executive remuneration, CEO performance, ethical decision-making, anti-bribery and corruption measures, whistleblowing, internal controls, audit and risk oversight, continuous disclosure, shareholder meetings, diversity, and environmental and social reporting.
Board independence is an important feature of the PNGX governance framework. Listed companies are expected to maintain an appropriate balance of executive, non-executive, and independent directors so that no individual or small group can dominate board decision-making. The framework also provides for formal procedures concerning board appointments, performance evaluation, succession planning, and director development.
Internal control and audit are treated as core board responsibilities. Listed companies are expected to maintain sound systems of internal control, safeguard shareholder investments and company assets, ensure the integrity of accounting and reporting systems, and maintain appropriate relationships with internal and external auditors. Formal arrangements for audit and risk oversight are also incorporated into the governance framework.
Corporate disclosure is another significant feature of the capital-market regime. Listed issuers must maintain corporate governance statements and provide information concerning the governance practices they follow. Where a company does not follow a particular governance recommendation, it is expected to explain the reasons and, where applicable, identify the alternative governance arrangements it has adopted.
The banking and financial-services sector operates under additional prudential governance requirements administered by the Bank of Papua New Guinea. The prudential framework covers matters such as board oversight, internal controls, risk management, audit, compliance, and the responsibilities of senior management. Superannuation funds are also subject to dedicated prudential requirements, including specific requirements concerning corporate governance and risk management.
State-owned and larger privately owned enterprises may also draw upon the listed-company governance framework as a governance benchmark, even where they are not themselves listed. This is particularly relevant in an economy where state participation and large enterprises remain important components of the corporate sector.
Overall, corporate governance in Papua New Guinea combines a statutory company-law foundation with a specialized capital-market governance framework and additional prudential requirements for regulated financial institutions. The system places particular emphasis on effective and accountable boards, independent judgment, separation of board and executive responsibilities, shareholder participation, continuous disclosure, ethical conduct, internal controls, audit, risk management, and transparency. The 2023 governance framework for PNGX-listed issuers represents a significant development toward a more structured and disclosure-based approach to corporate governance in Papua New Guinea.
References
Investment Promotion Authority of Papua New Guinea – Acts and Regulations
https://www.ipa.gov.pg/public/help.aspx?cn=ActsAndRegulations
Securities Commission of Papua New Guinea – Securities Commission Act 2015
https://www.scpng.gov.pg/wp-content/uploads/2022/09/sca2015.pdf
PNGX Markets – Corporate Governance Code for Listed Issuers, 2023
https://www.pngx.com.pg/wp-content/uploads/2023/06/PNGX-Corporate-Governance-Code-Effective-03-July-2023.pdf
Bank of Papua New Guinea – Superannuation Prudential Standard: Corporate Governance
https://www.bankpng.gov.pg/authorized-superannuation-funds
PNGX Markets – Listing Rules
https://www.pngx.com.pg/wp-content/uploads/2024/07/PNGX-Listing-Rules-Effective-01-08-2024.pdf
Contact
Securities Commission of Papua New Guinea
Address: MRDC Haus, Level 2, Champion Parade, Down Town, Port Moresby, Papua New Guinea
Phone: +675 321 2223
Email: ask@scpng.gov.pg
Website: https://www.scpng.gov.pg/
Disclaimer: This information was collected in April 2026 using AI tools and may contain errors or be out of date. Please submit any updates to: admin@ecgi.org
