Tag Archives: corporate governance

Mobile App Gives Investors Instant Access to Corporate Governance Information

App demonstration, watch the full video on the website here.

The recently launched Elapedia app gives investors around the world instant access to corporate governance practices at 100 publically listed companies in the four Pacific Alliance countries (Chile, Colombia, Mexico and Peru). The free Spanish-language app, which relies on publically available data, provides information about boards’ policies related to managing conflicts of interest, risk management, and other topics of interest to investors.

“Until now, there was no easy way to compare information on corporate governance between Pacific Alliance countries,” said Andrew Wilson, CIPE managing director. “With this useful tool, investors can quickly become informed on corporate governance requirements. It’s a way to access that information without having to dig through multiple sources. This app will be a huge benefit to large companies looking to invest, put up a subsidiary or buy a company in Pacific Alliance countries.”

The Elapedia app, which was supported by CIPE and developed by Governance Consultants S.A., represents an important step toward the economic and commercial integration of Pacific Alliance countries. By efficiently harmonizing corporate governance practices, the app will greatly improve the flow of investments and help to strengthen Latin American economies.

Established in 2011, the Pacific Alliance’s goals include establishing the free movement of goods, services and people; driving economic growth; and overcoming socioeconomic inequality. Pacific Alliance countries have made significant progress toward improving standards for corporate governance by fulfilling requirements set forth by the Organisation for Economic Co-operation and Development (OECD), Wilson said.

“With this user-friendly app, CIPE hopes to provide a valuable public service in line with one of our key focus areas—encouraging good corporate governance,” Wilson said. “Good corporate governance is critical to the integrity of business operations and to the overall institutional health of countries because it creates demand for better public governance and prevents devastating economic failures. The Elapedia app is intended to promote transparency and accountability, level the playing field, and encourage the disclosure or elimination of conflicts of interest.”

The Elapedia App can be downloaded for free from the App Store.

John Zemko is the Regional Director for Latin America & the Caribbean at CIPE. 

Democracy that Delivers Podcast #51: Podcast Throwback

It is Inauguration Week here in Washington, DC and in honor of this important symbol of democracy we are highlighting two conversations that have taken place on the podcast over the last year that focus on democratic and economic development and the link between the two:

Podcast guest Claude Fontheim (left) with hosts Julie Johnson and Ken Jaques.

In the first podcast throwback episode, CIPE Board member Claude Fontheim talked about how the rule of law, transparency, and good governance underpin strong, inclusive development. Fontheim explained that investment alone is not enough and that support for public institutions is needed to ensure that the benefits of trade and economic growth reach all segments of society. He discussed the direct link between development around the world and U.S. national security interests. Fontheim also talked about how U.S. companies contribute to the good governance of countries they invest in, and how they partner with NGOs and civil society to support initiatives in sectors such as health, education, and women’s rights.

Guest Dr. Kim Holmes (center) with hosts Jennifer Anderson and Ken Jaques.

In the second, Distinguished Fellow at The Heritage Foundation and recently returned CIPE Board member (after a 15 year hiatus) Dr. Kim Holmes discussed how his views on democratic and economic development have evolved through the years. Holmes explained specifically how his views on the role of economic development in conflict zones has changed and why. He also talked at length about his new book, The Closing of the Liberal Mind: How Groupthink and Intolerance Define the Left. 

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Improving Corporate Governance in Ukraine’s State-Owned Enterprises

On May 1, 2016, the law, On Introduction of Amendments to Certain Legislative Acts of Ukraine Regarding Protection of Investors’ Rights (No. 289-VIII), came into effect. It introduced a number of new aspects to Ukrainian corporate law including the right to shareholder derivative actions, direct payment of dividends to shareholders, and –perhaps the most relevant to reducing corruption and privatizing state owned enterprises– the establishment of independent directors.

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Democracy that Delivers Podcast #38: The Rapid-Reaction Anti-Corruption Project

Discussion moderator Christian Caryl with panelists Carl Gershman, Sarah Chayes and Eric Hontz at the Rapid Reaction Anti-Corruption Project event on September 16, 2016.

Discussion moderator Christian Caryl with panelists Carl Gershman, Sarah Chayes and Eric Hontz at the Rapid Reaction Anti-Corruption Project event.

On September 16, 2016, CIPE hosted a panel discussion on the need for rapid response in countries where a significant opportunity has appeared for achieving anti-corruption progress. CIPE’s Rapid Reaction Anti-Corruption Project is designed to address this need by deploying a team of anti-corruption experts with international stature to countries in transition. The experts, with NGO, business, and law enforcement backgrounds, would be swiftly deployed to countries which have governments newly empowered to address corruption, and a strong economic interest from foreign firms previously repelled by corruption risk.

Today’s podcast is a recording of the event at which experts discussed corruption challenges and practical solutions. The event was opened by CIPE Managing Director Andrew Wilson [then Executive Director (acting)] and was moderated by Chrstian Caryl, Editor of the Foreign Policy Democracy Lab blog.

Panel speakers included President of the National Endowment for Democracy Carl Gershman;  Senior Associate at the Carnegie Endowment for National Peace Sarah Chayes, and author of Thieves of State: Why Corruption Threatens Global Security Sarah Chayes; and CIPE Program Officer for Ukraine, Russia and Central Asia Eric Hontz.

Like what you heard? Listen to previous podcasts at: http://www.cipe.org/podcast

Ukraine Needs to Privatize its State-Owned Companies — But Rushing It Would Repeat the Mistakes of the Past

Storied aviation company Antonov, makers of the world's largest cargo plane, is in no position to be privatized.

Storied aviation company Antonov, makers of the world’s largest cargo plane, is in no position to be privatized.

 

The stakes for reforming Ukraine’s state-owned companies are high: these companies are the lifeblood of a corrupt, sclerotic crony capitalist system that scares away potential investors, drives off international donors, and robs the Ukrainian government of legitimacy. But  privatizing them as quickly as possible is not the solution.

Even after mass privatization in Ukraine in the 1990s, the government still owns a large portfolio of companies in a variety of sectors – from heavy industry to banking — that employ over 900,000 employees, far more than any private firm.  Reforming these state-owned enterprises (SOEs) has been a slow process and remains incomplete due to weak corporate governance, unmotivated management, and a near-total lack of transparency. None of these problems will be solved by simply speeding up the process.

The demand for rapid privatization is a familiar tune. Western “expert” advice in the early 1990s led to a huge transfer of wealth from the former Soviet Union to a handful of connected insiders, particularly in Russia: first through voucher privatization and later through the disastrously corrupt loans-for-shares schemes in the run-up to Russia’s 1996 election.

To get an idea of the scale involved, a 1993 paper by several Western economists who worked directly on the voucher privatization program estimated that most of the Russian Federation’s civilian industrial base – nearly every plant, factory, and mine in the country – was effectively sold off to insiders for between $5 and $10 billion, less than it would have cost to buy a single mid-sized Fortune 500 company (and roughly equal to the market capitalization of Whole Foods today). Still, at the time they regarded this program as a great success.

Unfortunately, the corrupt and predatory “oligarch” elite, created practically overnight, proved to be more interested in asset-stripping than in transforming their new firms into firms that could compete on world markets. What followed was the largest peacetime economic collapse of any country in recorded history. The sheer volume of banditry surrounding state assets during the 1990s led many average citizens in post-Soviet countries to believe that lower standards of living and a complete lack of justice were a natural part of living under democracy.

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Gender Diversity on Pakistan’s Corporate Boards

When it comes to gender diversity, too many boards still look like this in 2015 (Photo: Wikimedia Commons)

When it comes to gender diversity, too many boards still look like this in 2015 (Photo: Wikimedia Commons)

Corporate boards have historically been comprised mainly of men. However, a number of countries have begun imposing quotas for the number of women on the boards of publicly traded or state-owned companies — an idea that is now being considered as a European Union-wide rule. This is likely to compel businesses elsewhere in the world, including Pakistan, to consider the gender diversity of their own corporate boards.

According to the International Finance Corporation, just 13 percent of 303 companies surveyed in Pakistan in 2010 had more than one woman director — a sample that included publicly listed companies, large family-owned firms, and private, unlisted companies. 

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Riinvest Institute Celebrates 20 year Anniversary

Riinvest 20th Anniversary 2

CIPE’s long term partner Riinvest Institute for Development Research is celebrating their 20th anniversary this year. To mark the occasion, Riinvest held a conference on May 15 and 16 titled, “Activating the Sources of Economic Growth in Kosovo”. The conference brought together an impressive audience— the President and the Prime Minister of Kosovo*, the Deputy Minister of Finance, the World Bank Country Manager, other high level public officials, academics, business people, NGO leaders, the donor community, and members of the media.

*Kosovo’s newly-elected Prime Minister, Isa Mustafa, is the former President of Riinvest.

Riinvest leaders presented awards to a number of partners, individuals, and organizations who have supported the organization since its inception. CIPE had the honor of being presented the first two awards, one for Executive Director John Sullivan and one for the organization as a whole. CIPE Senior Consultant Carmen Stanila kindly received both awards on behalf of John and the organization.

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