PowerPoint Presentation by tQ7Cr31i


									Corporate Governance & Market Development in Africa’s
Capital Markets

African Stock Exchange Conference

Neil Harvey – CEO, Renaissance Africa

Accra, Ghana
Tuesday 30th October 2007

  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

          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

                                      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

Page 7
 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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