1. CORPORATE
GOVERNANCE
Corporate Governance

2. What is Corporate Governance ?
Corporate Governance refers to the ssttrruuccttuurreess && pprroocceesssseess
ffoorr tthhee eeffffiicciieenntt && pprrooppeerr ddiirreeccttiioonn && ccoonnttrrooll ooff ccoommppaanniieess
((bbootthh pprriivvaattee aanndd ppuubblliicc)) iinn tthhee iinntteerreesstt ooff aallll ssttaakkeehhoollddeerrss.

3. CORPORATE
GOVERNANCE
What is Corporate Governance ?
- Is a concept; one size does not fit all, HOWEVER:
- Basic Principles of Corporate Governance:
 AAccccoouunnttaabbiilliittyyRRiigghhttss ooff SShhaarreehhoollddeerrss
 TTrraannssppaarreennccyyIInntteerreessttss ooff SSttaakkeehhoollddeerrss
 FFaaiirrnneessss GGoooodd FFaaiitthh DDiilliiggeennccee
 IInntteeggrriittyy TTrruusstt DDiisscclloossuurree
 RReessppoonnssiibbiilliittyyCCoonnttrroollss CCoommmmiittmmeenntt

4. CORPORATE
GOVERNANCE
Corporate Governance Framework
 Governance Principles
 LLeeggaall // RReegguullaattoorryy
 CCooddeess ooff BBeesstt PPrraaccttiiccee
 SSttaakkeehhoollddeerr RReellaattiioonnss
 SSeellff RReegguullaattiioonn
 EEtthhiiccaall SSttaannddaarrddss
 RRiisskk MMaannaaggeemmeenntt

5. CORPORATE
GOVERNANCE
Why Corporate Governance Matters
• Enhances performance of companies
• Enhances access to capital
• Enhances long term prosperity.
• Provides a barrier to corrupt dealings- limiting discretionary decision
making, increasing oversight, introducing Codes of Ethics etc
• Impacts on the society as a whole:
Better companies, BBeetttteerr ssoocciieettiieess..

6. CORPORATE
GOVERNANCE
Good Corporate Governance and Good
Public Governance are complementary
““ TThhee pprrooppeerr ggoovveerrnnaannccee ooff ccoommppaanniieess wwiillll bbeeccoommee aass ccrruucciiaall
ttoo tthhee wwoorrlldd eeccoonnoommyy aass tthhee pprrooppeerr ggoovveerrnniinngg ooff ccoouunnttrriieess””..
James Wolfensohn
President of WB, 1999

7. CORPORATE
GOVERNANCE
Corporate Governance-
Channel of Growth & Development
Country level
Sector level
Individual firms

8. CORPORATE
GOVERNANCE
Corporate Governance-
Channel of Growth & Development
• Increases access to external financing leading to larger
investment, high growth & creation of more jobs
• Better allocation of resources
• Better management creating wealth
• Reduces the risk of financial crisis
• Better relationship with all stakeholders

9. CORPORATE
GOVERNANCE
Corporate Governance-
Principles for the Public Sector
• Generally derived from the private sector
• Ensures public accountability
• Promotes responsive and accountable institutions
• Good financial management of resources
• Good stewardship –
– Responsibility to protect the wealth of the state and its citizens
– Maintain and safeguard it in the interest of the citizens

10. CORPORATE
GOVERNANCE
Good Corporate Governance, Good Government
& Good Business go hand in hand
• Good Governance by Host Country
• Good Governance by Private Sector
• Good Governance by Investment Promotion Agencies
• Good Governance by Investors

11. CORPORATE
GOVERNANCE
Good Governance by Host Country
Transparent, stable and predictable investment climate:
• Appropriate legislation to support investment
• Anti corruption measures
• Effective , speedy and transparent resolution of disputes
• Forum for Investors
• Capacity Building

12. CORPORATE
GOVERNANCE
Good Governance by Private Sector
• Institutional Framework
• Role of Board of Directors
• Management
• Risk factors
• Transparency & Disclosure
• Reputation

13. CORPORATE
GOVERNANCE
Good Governance by Investment Promotion
Agencies
• Self Regulation
• Transparency & Disclosure
• Accountability
• Commitment
• Sound and Clear Administrative Policies
• Stakeholder engagement

14. CORPORATE
GOVERNANCE
Good Governance by Foreign Investor
• Good faith
• Business Integrity
• Governance Policies
• Human Capital
• Corruption Practices

15. CORPORATE
GOVERNANCE
Recommendations
• Continued advocacy on the benefits of Corporate Governance
• Codes of Corporate Governance for countries
• Capacity building
• Sourcing of funds to support Corporate Governance
development.
• Every institution , every stakeholder should provide input into
the corporate governance agenda

16. CORPORATE
GOVERNANCE
Conclusion
““ IIff aa ccoouunnttrryy ddooeess nnoott hhaavvee aa rreeppuuttaattiioonn ffoorr ssttrroonngg ccoorrppoorraattee ggoovveerrnnaannccee
pprraaccttiiccee,, ccaappiittaall wwiillll ffllooww eellsseewwhheerree.. IIff iinnvveessttoorrss aarree nnoott ccoonnffiiddeenntt wwiitthh tthhee lleevveell
ooff ddiisscclloossuurree,, ccaappiittaall wwiillll ffllooww eellsseewwhheerree.. IIff aa ccoouunnttrryy ooppttss ffoorr llaaxx aaccccoouunnttiinngg aanndd
rreeppoorrttiinngg ssttaannddaarrddss,, ccaappiittaall wwiillll ffllooww eellsseewwhheerree.. AAllll eenntteerrpprriisseess iinn tthhaatt ccoouunnttrryy--
rreeggaarrddlleessss ooff hhooww sstteeaaddffaasstt aa ppaarrttiiccuullaarr ccoommppaannyy’’ss pprraaccttiicceess mmaayy bbee-- ssuuffffeerr tthhee
ccoonnsseeqquueenncceess.. MMaarrkkeettss eexxiisstt bbyy tthhee ggrraaccee ooff iinnvveessttoorrss.. AAnndd iitt iiss ttooddaayy’’ss mmoorree
eemmppoowweerreedd iinnvveessttoorrss tthhaatt wwiillll ddeetteerrmmiinnee wwhhiicchh ccoommppaanniieess aanndd mmaarrkkeettss wwiillll
ssttaanndd tthhee tteesstt ooff ttiimmee aanndd eenndduurree tthhee wweeiigghhtt ooff ggrreeaatteerr ccoommppeettiittiioonn.. IItt sseerrvveess uuss
wweellll ttoo rreemmeemmbbeerr tthhaatt nnoo mmaarrkkeett hhaass aa ddiivviinnee rriigghhtt ttoo iinnvveessttoorrss’’ ccaappiittaall