In Kazakhstan: Improving Governance, Boosting the Economy
Corporate governance is a relatively new concept in Central Asia. But more and more executives are beginning to understand that good corporate governance makes companies more transparent, accountable, and trustworthy, especially in their relationships with investors and business partners.
Amina Turgulova, a spokesperson for Kazakhstan’s stock market, says investors have the right to know how a company is governed and controlled, and that, for listed companies especially, there are several corporate governance requirements companies need to follow.
“Some of the companies can be listed on the exchange, and they can disclose information," said Turgulova. “But if the information they disclose is not something the investor would see as good corporate governance… [or] if there are violations of minority shareholders’ rights, of course nobody would want to invest in this company.”
With support from IFC, member of the World Bank Group, more companies across Kazakhstan are adopting international standards in corporate governance as part of IFC’s commitment to developing the private sector. Good corporate governance is very much in line with this as it improves business performance. In emerging Europe and Central Asia alone, IFC has helped businesses raise over $3 billion in financing as a result of improved corporate governance.
Private Businesses Bring New Challenges
“We have been collaborating with IFC’s Corporate Governance Program in Europe and Central Asia since 2008,” says Zhardem Kurmangaziyev, the deputy corporate secretary of JSC Samruk-Kazyna. “The purpose was to create a professional community of corporate secretaries in Kazakhstan, as at that time it was a new profession, and not well-known.”
IFC helped launch the first corporate secretaries’ club in Kazakhstan and in all of Central Asia. The club aims to foster greater understanding of the role of corporate secretaries and strengthen the region’s corporate governance movement.
The key, says Nurtai Irkegulov, the corporate secretary for Bank CenterCredit, is building trust, because trust builds business. “Corporate governance makes our companies more open and understandable to society, but also to investors,” he says. “When they come to our bank they feel more interested and more attracted because they can see our policies and our personnel, they understand the bank, and so they’re more interested in working with us than with companies that do not have corporate governance in place.”
Better Governance for a New Economy
Experts say corporate governance is important for all parts of the Kazakh economy. “Kazakhstan needs investment, and proper corporate governance makes the country more attractive for investors, and not just in the oil and gas industries,” explains Gradislava Akhmetova, who runs her own firm, Governance & Management Consulting, and is an IFC partner in Kazakhstan. “With more investment, the entire population benefits.”
The tenets of corporate governance even have a place in the thousands of smaller businesses across the country. In the back of a building on a busy street in Almaty, Damegul Abikhanova owns a four-person firm that makes traditional Kazakh dresses and is a client of KazMicroFinance. “There’s an accounting form where I note all my expenses, I write it all down every day so I have a record,” she says.
As independent businesses crop up all over Kazakhstan, the idea is the same. From dresses to big corporations: better, transparent, and accountable governance leads to better decisions, resulting in improved performance and better access to capital.
The IFC Corporate Governance Program in Europe and Central Asia is being implemented in partnership with the Swiss State Secretariat for Economic Affairs (SECO) and Development Bank of Austria (OeEB).
For more information please visit IFC corporate governancewebsite.