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									Corporate Governance & Market Development in Africa’s
Capital Markets

African Stock Exchange Conference


Neil Harvey – CEO, Renaissance Africa



Accra, Ghana
Tuesday 30th October 2007
 Content


  Why Corporate Governance is important


  Corporate Governance and foreign capital


  Weaknesses in Corporate Governance


  General principles to guide policymakers




Page 2
 Defining Corporate Governance
 Protecting interests of stakeholders



         Corporate governance deals with the ways in which
              suppliers of finance to corporations assure
           themselves of getting a stream of return on their
                               investment.

          How do suppliers of finance get managers to return some of the profits to them?


          How do they make sure managers do not steal the capital they supply or divert it
           for other uses?


          How do they control management?



Page 3
 The importance of good Corporate Governance
 Long term ambitions


  Promote a healthy environment for long-term investment


  High valuations


  Low cost capital


  Not just for the bad actors but for all market participants




Page 4
 Are international investors needed?
 Driving development


  Drive valuations to international levels


  Africa will require the capacity of a global investor base


  International and domestic markets are not parallel universes


  Africa businesses will continue to be led, managed and controlled by Africans




Page 5
 Problems in developed markets
 Best practice to be effective


  No foolproof model


  Structure in less important than
   the way in which structure is
   operated



                                      Insert picture/graphic/chart




                                         “No one model is superior”



Page 6
Five useful principles



           People      Accountability       Audit         Transparency       Discipline



   People are more important than processes

   Shareholder accountability

   External audit must be independent and penetrating

   Disclosure and transparency are crucial to market integrity

   There must be an appropriate regime of regulatory discipline to back these
         obligations




Page 7
 Conclusions
 The road to success

           A strong regulatory framework is critical to market development and leaders who
          can respond to a changing environment are necessary to ensure that frameworks
          adapt to create an environment that rewards transparency, encourages investment
                                  and protects all market participants

          Bad Corporate Governance                     Good Corporate Governance




Page 8

								
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