slide1
Download
Skip this Video
Download Presentation
Corporate governance in emerging countries

Loading in 2 Seconds...

play fullscreen
1 / 21

Corporate governance in emerging countries - PowerPoint PPT Presentation


  • 105 Views
  • Uploaded on

Corporate governance in emerging countries. With the support of :. Daniel Córdova. Dean of the School of Economics of UPC And Executive Director of INVERTIR. Content. Corporate governance in emerging countries Corporate governance in family businesses Case study Some activities in Peru

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Corporate governance in emerging countries' - faith-bentley


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1
Corporate governance in emerging countries

With the support of :

Daniel Córdova

Dean of the School of Economics of UPC

And Executive Director of INVERTIR

content
Content
  • Corporate governance in emerging countries
  • Corporate governance in family businesses
  • Case study
  • Some activities in Peru
    • First Corporate Governance contest
    • Corporate Governance Diploma
    • Guidelines for independent directors appointed by pension funds
    • Studies in process
slide5
TWO APPROACHES FOR CORPORATE GOVERNANCE

The “negative” approach:

Agency problems between Management

and (atomized) shareholders. Risk controls, transparency, etc.

Predominant in

academic

literature

Approach to address closed-family businesses governance issues

The “positive” approach

Good corporate governance as a way to increase company value

More relevant for

emerging markets

slide6
TWO MAIN ISSUES FOR CLOSED-FAMILY BUSINESSES
  • Succession Plan and the role of shareholders, directors and managers
  • Access to better financial conditions (capital market)

To increase the company value

slide7
Better corporate governance, better path of growth

Control crisis

Management

Independence

crisis

Corporate

Organization

Size

Leadership

crisis

Delegation

Foundational

Age

Functional

Organization

Company age

Management and

Property together

Management and property

separated

slide8
Better corporate governance, better relationship

Family – Shareholders – Directors - Management

Family

Shareholders

Directors

Management

From personal relationships and informal rules to

impersonal relationships and formal rules

slide9
Better Corporate Governance, better financial conditions

Family

Business

Own capital

Professional

Company

Regular loans form banks

Financial Cost

Corporation

Complex financial

structures

Capital markets

Company size

case study mining family business
Case study: mining family business
  • Family company listed at the Lima Stock Exchange
  • More than 30 years old company
  • US$ 60 million annual sales
  • No Strategic Plan
  • Shares:
    • 75% voting shares
    • 25% no voting shares
  • Board: family members and lawyers of the family
  • Management:
    • 4 family members (2-2 brothers-cousins) with salary and “general manager empowerment”
    • O “true” professional general manager
  • 35 % family
  • 20 % en Treasury
  • 20 % floating shares
case study mining family business1
Case Study : mining family business

Challenges (1999-2000)

  • Mining prices were low
  • Directors compensation system and expenses were not informed to shareholders
    • Cross pockets (family and
    • Investments on companies related to directors
  • Two groups in conflict:
    • Two family directors wanted to continue the same way
    • Two family directors wanted to make a radical corporate governance reform
  • Shares were not liquid at the LSE:
    • “I don’t care about share value at the LSE”, Vice Chairman of the Board.
    • “I need to sale my shares and I can not” Member of the family
the dilemma to grow or the disappear
The dilemma: ¿To grow or the disappear?
  • High risk related to mining prices
  • Undercapitalization
  • Bad management
  • Family-managers overpaid
  • Permanent conflict of interests
  • Law suits between managers

To disappear

To grow (actually happened)

  • One share – one vote : Public Offer
  • Professional CEO and CFO
  • Regulation of Board compensation
  • “Empowerment” of management
  • Tender policy for acquisitions
  • Concentration in core business
  • Investors relations policy
  • Sale of treasury shares to pensions funds
  • New international strategic investors
slide15
Shareholders meetings
  • Information for shareholders
  • Dividends policies

Shareholders treatment

  • Independent directors
  • Conflict of interest
  • Committees and auditing

Board policies

  • Opportunity
  • Clarity
  • Mechanisms

Transparency

slide16
Management structure
  • Procedures …
  • Planning and contingencies

Management Structure

And risk management

  • Relationship with suppliers, clients,
  • Community
  • Relationships with workers
  • Environment policies

Social Responsibility

slide17
Deal of the Year

Best Annual Report

Best governance in privatized

company

Best information system

slide19
Handbook for independentDirectors appointed by pension funds
  • International and national context
  • The Board and the Peruvian Law
  • The Board and CG Guidelines
  • Pensions Funds and independent
  • Directors
  • Recommendations
studies in process
Studies in process
  • Corporate Governance for Family Businesses
  • Good and bad cases on corporate governance (with CAF)
  • Corporate Governance in emerging markets (20 cases studies)
  • Assessment on corporate Governance for SOE (with IFC)
slide21
Corporate governance in emerging countries

With the support of :

Daniel Córdova

Dean of the School of Economics of UPC

And Executive Director of INVERTIR

ad