Corporate Governance in Mongolia: Results from the

Transcript:Corporate Governance in Mongolia: Results from the:
Corporate Governance in Mongolia: Results from the 2009 Corporate Governance ROSC Assessment A presentation by Sebastian Molineus World Bank Corporate Governance Group In Ulaanbataar on May 27, 2010 The Definition of and Business Case for Corporate Governance (CG) The World Bank’s CG ROSC Program Key Findings of the CG ROSC for Mongolia Policy Recommendations 2 out of 26 To begin with, it is important that we are all on the same page as to what good corporate governance means The OECD defines corporate governance as: A system by which companies are directed and controlled … which involves a set of relationships between: a company’s management board of directors its shareholders and other stakeholders … and which provides the structure through which company objectives are set, attained and monitored. Simplified definition 3 out of 26 A simple enough definition. But reality is more complex: Act in interest of Elect & dismiss Shareholders - The general assembly - Directors - The board of directors - Managers / Executives - CEO / mgt. team / ExCom - Provide capital to Report & answer to Guide & control Are accountable to Internal—Corporate—Perspective Illustration 4 out of 26 Good board practices Robust control structures Strong disclosure & transparency regime Protection of (minority) shareholder rights The following illustration offers a ‘look & feel’ of the key themes CG touches upon Robust legal & regulatory environment Strong enforcement regime Illustration 5 out of 26 Improves Access to Outside Capital Improves Valuation and Lowers the Cost of Capital Builds/Improves the Company’s Reputation Optimizes Operational and Financial Efficiency The good news: much research and analysis by renown international experts demonstrates that CG adds to the corporate “bottom line” 6 out of 26 And, at the same time, CG can bring important benefits to the government , markets, and economy as a whole For regulators and supervisors: A first line of prudential defense Increased financial stability & reduction to crisis For markets: Higher market capitalization and liquidity Increase in investor confidence and trust Ability to attract, allocate & monitor investment For economies: More “champion” companies that can compete and grow internationally Higher economic growth 7 out of 26 The Definition of and Business Case for Corporate Governance (CG) The World Bank’s CG ROSC Program Key Findings of the CG ROSC for Mongolia Policy Recommendations 8 out of 26 A ROSC consists of a gap-analysis, policy recommendations, and action plan, and