RWANDA Trends and Developments Contributed by: Molly Rwigamba, Happy Mukama, Dominic Ococ and Erick Mugisha, RR Associates
Capital Market Corporate Governance Code 2024 The Capital Market Corporate Governance Code 2024 requires companies to disclose material information on both financial and non-financial matters, including environmental and social issues in addition to other required matters. Pursuant to Article 26, the board of directors must ensure full, fair and timely disclo - sure to shareholders and other stakeholders, includ - ing information relevant to ESG matters. Article 27 requires companies to include in their annual reports non-financial information such as environmental and social risks, measures taken to address those risks, and performance against set targets, as well as dis - closure of sustainability frameworks and stakeholder engagement practices. Although the code is not binding on all companies operating in the Rwandan financial sector, it sets influ - ential standards that many entities follow. ESG reporting obligations for insurers In the insurance sector, National Bank of Rwanda issued Regulation Number 47/2022 of 2 June 2022 on publication of financial statements and other dis - closures by insurers. Article 4 requires the board of directors of an insurer to prepare an integrated annu - al report in accordance with International Financial Reporting Standards (IFRS). The report must cover the information on ESG, risks, governance practices, and the insurer’s strategy and performance in relation to social, environmental, and economic impacts. This ensures that ESG considerations form part of manda - tory disclosures. Board Tenure Limits and Shortened Terms to Promote Board Dynamism The rationale for tenure reform Limiting the tenure of board members has become a key strategy used in corporate governance in the financial sector in Rwanda. The underlying rationale is to promote dynamism and to avoid board members becoming complacent. Extended service on a single board often weakens a director’s independence due to familiarity with management and can lead to group - think, thereby reducing the board’s ability to exercise strong oversight. The shortened terms facilitate regu - lar board refreshment and effective rotation.
Integrated Reporting Council (IIRC) framework. These guidelines operate alongside the BNR requirements for institutions that are both listed and supervised. Rwanda’s adoption of IFRS Sustainability Disclosure Standards is guided by a national roadmap led by the Institute of Certified Public Accountants of Rwanda, launched in May 2025, which establishes phased implementation beginning on 1 January 2025 and sets out the expansion of sustainability-related disclosures across the financial sector. The BNR Sustainability Disclosure Guidelines The National Bank of Rwanda (BNR) issued Guide - lines Number 040/2024 of 25 November 2024 on the Disclosure and Reporting of Sustainability-Related Financial Information for Financial Institutions. Article 5 of the Guidelines requires institutions to develop an approach for disclosing climate-related and envi - ronmental financial information. It further states that ESG reporting must align, at a minimum, with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and IFRS S1 and S2. Reports are also required to cover governance frameworks, strate - gic decision-making, risk management systems, and relevant metrics and targets. The Guidelines are mandatory for all financial institu - tions under BNR supervision and the implementation framework operates across three Tiers (groups): • Tier I Institutions include listed companies, the largest commercial banks, general and life insurers, the public pension fund, and Umwalimu SACCO. Reporting is mandatory for financial years starting 1 January 2025, focusing initially on climate-related disclosures aligned with IFRS S2. • Tier II and III Institutions include deposit-taking microfinance institutions, captive and micro insur - ers, private pension funds, non-deposit financial services, MUGANGA SACCO, Mutual insurers, and health maintenance organisations (HMOs). Manda - tory reporting begins 1 January 2026. • Tier IV Institutions comprise Umurenge and non- Umurenge SACCOs with mandatory reporting beginning 1 January 2027, providing the longest transition period for smaller community-based institutions.
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