IFC, a member of the World Bank Group, is working with Myanmar regulators to benchmark the corporate governance practices of Myanmar companies against international standards to help them improve performance, according to a statement. Numerous studies show that stronger governance helps companies operate more efficiently and manage risks better.
In cooperation with the Securities and Exchange Commission of Myanmar (SECM), the Yangon Stock Exchange (YSX), and the Directorate of Investment and Company Administration (DICA), IFC is hosting a two-day workshop that began on the 16 January in Yangon for dozens of Myanmar companies to learn about the importance of corporate governance and best practices.
At the workshop, IFC experts lead participants in evaluating the corporate governance practices of listed Myanmar companies as examples. The assessment is based on the Association of Southeast Asian Nations (ASEAN) Corporate Governance Scorecard – the regional benchmark of best practices; company performance is rated on various areas such as equitable treatment of shareholders, responsibilities of the board, and disclosure and transparency.
“Corporate governance assessments can help Myanmar companies analyze their performance, identify areas for improvement, and bring their practices in line with international standards,” said U Htay Chun, a Commission Member of the Securities and Exchange Commission of Myanmar. “This will help companies set realistic goals for reform, improve their performance, and attract more investment.”
Many Myanmar companies have underdeveloped board of directors, poor transparency, and rudimentary control frameworks. To tackle this, IFC and SECM initially plan to assess the corporate governance practices of around 30 Myanmar companies based on the ASEAN corporate governance methodology. The scorecard system is a recognized way to raise awareness of the importance of corporate governance and promote good practices in the market. The assessments may expand to cover more Myanmar companies as the project progresses.
“We have conducted similar initiatives globally with great success and strongly believe this will help Myanmar companies close the gap against international standards,” said Chris Razook, IFC’s Corporate Governance Lead in East Asia and the Pacific. “As an investor, we’ve seen firsthand how good governance can help companies attract capital and improve long-term performance. This will also spur much-needed investor confidence in Myanmar’s nascent capital market.”
IFC has also been promoting good corporate governance practices among Myanmar’s family businesses, which are a key fabric of the country’s economy. IFC’s Corporate Governance Program in Myanmar is implemented in partnership with the Australian Department of Foreign Affairs and Trade, and the U.K. Department for International Development, the statement said.