Dhivehi Raajjeege Gulhun PLC well known as (Dhiraagu) name while delivering leading telecommunications and digital services across the Maldives. Dhiraagu operates as a public limited company through its mobile platforms and fixed-line and broadband internet services. The company also provides enterprise solutions to local industries. It focuses on innovation combined with sustainability principles to support individuals and their communities throughout the Maldives.

Dhiraagu functions under an efficient corporate governance system that provides strengthened transparency and strategic oversight and accountability. Two core shareholders lead the company ownership through Beyon the telecommunications group and the Maldivian government having joint ownership together with public shareholder representation. The strategic direction and operational monitoring of Dhiraagu is managed by the Board of Directors whose membership combines representatives from every shareholder group to focus on long-term stakeholder value.

Dhiraagu maintained its dedication to good governance and operational performance alongside community outreach during the year of 2024. Regular Board and committee oversight identified through comprehensive risk management and strict adherence to national regulations kept the company at its high standards. Dhiraagu advances technological innovation alongside digital inclusivity in its mission to establish leadership within the Maldivian telecom market.

1-   Effectiveness of the Board Composition

a-     Board Composition Overview

9 Members lead Dhiraagu’s Board of Directors to maintain representation of its shareholder diversity. Beyon’s 5 directors are appointed as board members while 3 directors originate from the Government of Maldives and 1 director emerges from public shareholders attending the Annual General Meeting.

b-     Independence and Objectivity

The directors meet all independence criteria specified by the Capital Market Development Authority (CMDA) because 8 out of 9 members are non-executive. The executive role of CEO & MD Ismail Rasheed has made him non-independent while all other members of the board hold independent status (Faizal & Laking, 2013). The board continuously checks for director independence through mandatory reporting about personal or professional conflicting interests. Through this framework the Board executes neutral decisions that benefit the company without external pressures for personal advantage.

c-     Tenure, Skills, and Diversity

The Directors represent a wide range of professionals who maintain varying lengths of service which generates deep institutional expertise together with contemporary insights. The Board contains both directors who began their position in 2024 alongside others who have served more than 5 years to manage institutional continuity alongside fresh perspectives (Gallego-Álvarez & Rodriguez-Dominguez, 2023). The directors hold knowledge from multiple fields which consist of telecommunications, finance, governance, law and technology expertise. The company created gender diversity through 2 female directors to improve their corporate decision-making in line with established governance standards.

d-     Appointment and Succession

The directors appointed by Beyon and Maldives Government conduct their positions through stakeholder appointment methods yet the Public Director emerges from a voting system involving public shareholders in open nominations. The year 2024 saw 5 new director appointments or replacements as part of a strategic plan that promoted succession within the company (Wiersema et al., 2018).

e-      Board Committees

2 standing committees of the Board known as the Audit Committee and Remuneration Nomination and Governance Committee have received essential board responsibilities to increase operational efficiency. The committees adopt independent non-executive directors who have appropriate expertise to fill their total memberships. Financial reporting stands under the oversight of the Audit Committee which manages risk and compliance functions together with nomination, remuneration strategy and governance policy being governed by the Remuneration Nomination and Governance Committee (Kolev et al., 2019). The committees dedicate attention and specialized expertise that supports good corporate governance in essential functions.

f-      Governance Practices and Engagement

Dhiraagu operates under a well-defined leadership structure where the Chairperson and Chief Executive Officer positions belong to unrelated persons. The separation of roles helps create stronger monitoring functions that avoid authority accumulation (Thompson & Alleyne, 2022). The Board conducts quarterly meetings while holding 5 sessions in 2024 together with separate non-executive director private sessions to conduct independent performance assessments. The directors maintain continuous contact with the leadership team to participate in strategy discussions while receiving complete decision materials ahead of time for their decision-making process.

g-     Conflicts of Interest Handling

Directors must seek approval from the company to declare potential conflicts which requires their abstention from participating in vote decisions related to these specific situations. The conflict management system was used at Dhiraagu through 2024 when handling incidents such as CEO performance assessments and public director selection procedures. All meeting agendas at Dhiraagu include these disclosures which emphasize the Board’s dedication to ethical governance and impartial decisions for maintaining operational integrity (Felo, 2001).

2-   Analyse the Corporate Governance Practices

a-     Governance Framework and Structure

The company operates under regulations found in the Republic of Maldives Companies Act alongside CMDA’s Corporate Governance Code and Maldives Securities Act and Listing Rules of the Maldives Stock Exchange. The entity runs its operations through established authority chains combined with a structured Board leadership supported by expert committees. Through its complete framework the company safeguards control across all management levels up to strategic planning down to operational execution.

The governance structure at Dhiraagu is strong because separate governing roles and duties create productive decisions coupled with effective risk management strategies.

b-     Board Composition and Effectiveness

The 9-member Board comprises independent and non-executive directors who come from three different shareholder groups including Beyon along with Government of Maldives and public shareholders. The diverse composition and independent nature of the Board members who come from both telecommunications and financing and legal expertise and governance background enable strong strategic leadership and effective oversight. Through their defined meeting schedule and private conversation format the board members are able to execute honest assessment and decision-making procedures.

c-     Board Committees and Delegated Oversight

An assortment of independent non-executive directors having appropriate expertise. Their advisory services to the Board, and their role in transparency are vital hallmarks of their significance. The committees drive strong governance by actively reviewing policies along with performance results and organizational risks. Diligent responsibility management occurs when committees regularly meet and remain independent while having clear Terms of Reference.

d-     Risk Management and Internal Controls

The risk management system at Dhiraagu operates throughout its governance practices. The Risks Register receives quarterly reviews from the Audit Committee and Board while a Risk and Compliance Officer executes its management as a full-time role. The Audit Committee oversees the Internal Audit function’s activities which completed 11 internal audits together with 12 special audit tasks to inspect financial strategy operational and threat risks in 2024. Financial approval limits and accountability definitions exist under the Authority Matrix framework (Ahmad et al., 2015). Dhiraagu applies effective and active approaches to manage their risks throughout their operations. A mature internal control environment displays its responsiveness through frequent audits and risk assessments and structured authority delegation system. Quarterly oversight functions create an essential system of oversight.

e-     Legal and Regulatory Compliance

Through its legal department and its combination of internal and external legal counsel the company maintains full compliance with telecommunications regulations and both securities law and company law. The company maintained a breach-free and legal proceeding-free year in 2024. The regulatory requirements for issuer disclosure together with corporate reporting standards are fulfilled by prompt corporate reporting and shareholder notifications. The organization’s legal compliance department upholds corporate (Melendy & Huefner, 2011)

f-      Conflict of Interest and Ethical Conduct

Organizations have developed conflict of interest management to work inside Board governance structures. Each director must declare potential conflicts of interest before meetings while they must leave the room if such a conflict arises. The Board followed standard protocol during 2024 when multiple directors such as Dr. Majid and Mr. Mithun Vellayappan abstained from board appointment and CEO performance review discussions. To reinforce ethics and conduct the company maintains its internal policies and subject these policies to both board-level and organizational scrutiny (García-Sánchez et al., 2014). Tailored management at Dhiraagu for dealing with potential conflicts of interest supports both the preservation of impartiality and builds relationships of trust with stakeholders. To establish an ethical and disciplined governance culture meetings should maintain this item as part of their standard agenda .

g-     Shareholder Rights and Engagement

The company upholds shareholder rights by maintaining transparency through reporting as well as scheduled meetings and continuous communication. The company organizes Annual General Meetings and Extraordinary General Meetings using FahiVote electronic participation which enables strong attendance. Shareholders can access company documents while obtaining access to minutes in addition to having their feedback actively encouraged by the organization. Through prompt shareholder updates and encourage investor participation Dhiraagu demonstrates its dedication to participatory governance. Technology helps the company expand its shareholder base by adopting contemporary and shareowner-friendly governance methods (Fields & Goodman, 2016).

h-     Executive Remuneration and Evaluation

Executive compensation at Dhiraagu depends on achievement metrics as well as market standards and executive strategic value but excludes stock options or extravagant benefits. The RNG Committee guides these procedures while shareholder approval granted changes to the Board Remuneration Policy during 2024. Every year the Board and its committees undergo performance reviews which will be both internally monitored and internally reviewed (Kanapathippillai et al., 2024). Organizations have established fair executive payment systems that use performance metrics as one of the main criteria and ensure maximum transparency. Board performance assessment that happens regularly leads to governance effectiveness improvements while the exclusion of stock options prevents misaligned incentive risks.

3-   Corporate Governance Issue / Failure

The shortage of public shareholders in the Board of Directors stands out as a main governance issue because it undermines board independence and weakens shareholder democracy.

a-     Identified Issue: Limited Representation of Public Shareholders on the Board

• 5 members on the board receive their appointments from Beyon – the largest shareholder.
• 3 positions belong to directors appointed by the Government of Maldives alongside 5 who belong to directors appointed by Beyon and 1 public shareholder representative elected by the public.
• 1 director emerges from the voting process of public shareholders whereas the remaining board members are selected by other parties.

The entire one vote distribution at Board level goes to public investors since they possess a portion of company equity while representing 11% of board decision power. The minority shareholder’s ability to impact strategic decisions alongside oversight and governance decisions is naturally restricted due to this structure which upholds legal requirements yet provides transparent disclosure.

b-     Why This Is a Governance Concern:

• A board with weighted voting practices allows majority shareholders to exercise excessive control which leads them to focus on their own needs above stakeholders and public investors’ priorities.
• Public representation deficiencies create weaknesses which reduce the ability to keep executive management and major shareholders accountable.
• The strong mechanisms existing at Dhiraagu for shareholder communication including AGMs and digital voting fall short when it comes to meaningful contributions to governance processes such as policy development and risk monitoring and key personnel selection.
• The organization deviates from international governance standards since OECD guidelines together with institutional investor recommendations stress the importance of balanced boards which protect minority shareholder rights.

c-     Mitigating Factors Acknowledged in the Report:

• The RNG Committee facilitates both an open nomination and election procedure for Public Directors through published requirements and approval processes.
• At AGMs shareholders who are members of the public receive time to communicate their opinions about governance-related issues.
• Non-executive independent directors make up the majority of the board to protect oversight independence when public representation remains restrained.

4-   Recommendations to address the identified issue

a-     Increase Public Shareholder Representation on the Board

Dhiraagu’s corporate governance needs a structural amendment to its Articles of Association or governance framework which should introduce minimum 2 Public Directors instead of one to the Board. The proposal to expand public director presence on the Board would enhance multicultural perspectives during decision making while including more stakeholders in decision processes.

b-     Introduce a Public Shareholder Advisory Committee

An advisory committee for shareholders comprised of selected public shareholders should be founded as a new recommendation. The committee would assist the management before Annual General Meetings (AGMs) by offering evaluation on governance decisions and proposed resolutions as well as assessing public investor sentiments. This advisory committee would serve as a vital tool to boost both shareholder participation and corporate openness even though members do not carry voting rights (Dey et al., 2024). Public shareholders would receive a formal method through the Shareholder Advisory Committee to actively participate in company strategic dialogues even though they do not hold board appointment positions.

c-     Strengthen the Nomination Process for Public Directors

Dhiraagu’s corporate governance needs a structural amendment to its Articles of Association or governance framework which should introduce minimum 2 Public Directors instead of one to the Board. The proposal to expand public director presence on the Board would enhance multicultural perspectives during decision making while including more stakeholders in decision processes (Putra & Setiawan, 2024).

d-     Include Public Director in Board Committees

For better Public Director effectiveness the role should occupy membership on either the Audit Committee or Remuneration and Nomination and Governance Committee of the board. The Public Director can influence core governance areas and fulfill their oversight tasks better when they participate in board committees while stretching their influence beyond general board meetings. Through participation in a committee the Public Director will get essential knowledge to effectively support board decisions regarding financial control and executive pay and governance framework development.

e-     Enhance Governance Disclosure on Shareholder Rights

The future annual reports should contain clear public shareholder rights information and summaries of decision feedback and escalation mechanisms for concerns. Dhiraagu should establish clear and transparent disclosure methods to increase public shareholder trust and understanding about their rights together with available reporting mechanisms for concerns and suggestions. Such educational content would address the formal governance mechanisms to support less experienced retail investors who lack understanding of standard governance procedures.

5-   Reference

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