compliance with legal and regulatory requirements. this is why there is a shift in emphasis towards appointing non - executive and independent directors, who are people who are not part of the management team of the company. these directors are supposed to act as an independent check on corporate management. the role of a corporate board of directors has become technical and demanding and hence directors are required to have business and technical expertise. they must be able to understand the nature of the firm ’ s business, its financial performance and the risks facing the firm. i should add that the responsibility of directors today carries serious personal and collective liabilities. to maintain public confidence, companies must demonstrate a strong commitment to the development and enforcement of rigorous standards of corporate governance. these standards must encompass the relationship between a company ’ s board of directors, its bis central bankers ’ speeches management, and its shareholders. they must require corporate leaders to be faithful to shareholder interests and act with both competence and integrity. corporate governance has become the sine qua non for any business which cares about its reputation. the various scandals i noted earlier have been a loud wake - up call, focusing attention on the need to strengthen corporate governance, to improve accountability, transparency and control. in response, a number of measures have been taken or proposed by various countries to improve corporate governance, such as the sarbanes oxley act in the united states. in uganda, the financial institutions act ( fia ) 2003, includes an entire chapter devoted to corporate governance. in addition, the bou has issued additional corporate governance guidelines for the financial sector. the companies act 2012 ( chapter f ) also reinforces corporate governance. good intentions do not always prevent unintended consequences – which is why a forum such as this one can be very helpful in illuminating the potential pitfalls of well - intended corporate governance proposals. some unintended side - effects might include high compliance costs, ambiguous liabilities, or reduced innovation. it is counterproductive to make disclosure so onerous as to make the cost of compliance prohibitive or impractical. regulations and standards, whether by regulators, government, trade groups, or the companies themselves, should not impede the ongoing process of innovation. rather we must ensure an environment that is conducive to effective and efficient operations. a credible case can be made that we should focus on principles as the bedrock for rules. we should establish key principles against which corporate decisions should be evaluated, regardless of whether or not a certain type of behavior is

’ s view on current topics within our sphere of competence. in all this communication, it is the intention of bou to send out various messages to the public on wide ranging issues and events. we for example at periodic intervals, issue papers on the state of the economy. we also issue annual banks supervision reports. it is our expectation that in the near future we shall begin issuing regular reports covering developments in the payment system. i should finally inform you that much as the media and indeed the public have the right to access public information, the nature of our operations sometimes compels us to keep to ourselves some of the information that comes to our knowledge through the execution of our work. banking, by its very nature, revolves around confidentiality. to give a practical example, one can only imagine how one would feel if details of one ’ s personal bank account were to be given out to a third party without the account holder ’ s express permission. likewise, bank of uganda, as banker to government and to commercial banks is bound by the confidentiality and trust that exists between a bank and its customers. most important of all, the central bank as the supervisor and regulator of the financial sector is charged with the responsibility of ensuring that the financial sector is healthy and sound at all times so that depositors ’ funds are safe. the relationship between the financial institutions we supervise and the bank of uganda can, in this regard, only be compared to that of a patient and his or her doctor. reckless disclosure of information about the financial sector can end in disruption and in the end cause a run on a bank. you should be informed that while it takes decades to build and attain depositor confidence in the financial sector, it only takes a wink to get this confidence shattered through irresponsible disclosures. there have, therefore been occasions when we have had thoughtful inactions. in brief, we have had open market operations, open mouth operations and open only eyes and ears operations in regard to threats to financial stability. let me now address myself to what i regard to be the challenges to the media. in assessing the contribution of the media to the financial sector as a public good, i would like to distinguish among at least four types of effects. the first type is characterized as “ the news effect ”, which would normally reflect factual or formal positions or events. in a sense, the media ’ s reporting would be faithful and non - controversial. a second type can be identified as rumour effect. often