Yangon, Myanmar, April 5, 2019 —A new report which examines the corporate governance performance of Myanmar’s companies shows there’s strong potential for the business sector to improve practices and become more competitive in local and regional markets.
The Myanmar Corporate Governance Scorecard 2018 is the first report of its kind in the country and assesses the performance of 24 companies in Myanmar. It is the joint work of IFC, a member of the World Bank Group, the Securities and Exchange Commission of Myanmar, the Yangon Stock Exchange and the Directorate of Company Investment and Company Administration (DICA).
The report, which assesses companies on the basis of the Association of Southeast Asian Nations (ASEAN) Corporate Governance Scorecard, shows that Myanmar companies scored an average of 30 percent, compared to the ASEAN average of 69 percent. It does find that some Myanmar companies are performing significantly above the average and listed companies are outperforming public and private companies.
While noting the assessment was undertaken before Myanmar’s new Companies Law came into effect, it recommends companies should focus on key areas including rights of shareholders and stakeholders, improving companies’ disclosure, transparency, governance structures, and board composition along with board accountability for company decisions.
“Good corporate governance is a critical component for the sustainable development of any organization,” said Maung Maung Win, Chairperson, Securities and Exchange Commission of Myanmar. “It is important for Myanmar companies to improve their corporate governance practices whether they are seeking to expand their business, foster stronger ties with international partners, or develop a smooth succession plan.”
The report offers recommendations on how companies can improve to close the gap with other ASEAN markets, boosting Myanmar’s economy. It identifies areas for quick improvement as well as longer-term actions requiring close collaboration between government, private sector, and civil society organizations.
Myanmar companies are already taking steps to improve their corporate governance. Earlier this week, the Myanmar Institute of Directors (MIoD) and DICA offered the country’s first Director Certification Program in partnership with the Singapore Management University.
“The report that we are launching today takes a step towards creating a favorable, predictable, and investment friendly climate,” said Jenni Hall, Private Sector Development Lead for the United Kingdom’s Department for International Development (DFID). “The report provides practical solutions to enhancing performance in these areas. These recommendations are a leap towards creating a favorable, predictable, facilitative and friendly investment climate broadly, and UKaid is pleased to be lending our support to IFC’s work in this area.”
“This report clearly highlights the opportunities and potential for Myanmar companies to improve corporate governance to help them access external financing for growth and expansion,” said Vikram Kumar, IFC Country manager for Myanmar and Thailand. “If companies can seize this window of opportunity and boost their corporate governance practices they will reap the benefits of becoming more profitable, open and competitive in Myanmar and regional markets.”
IFC’s work in corporate governance is supported by the Governments of Australia and the United Kingdom.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org
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About the Securities and Exchange Commission of Myanmar
The Securities and Exchange Commission of Myanmar (SECM) was formed on 19 August 2014, according to the Notification No.64/2014 of the office of Union Government. It is composed of seven members headed by Chairman cum Deputy Minister of Ministry of Planning and Finance. The Commission is a regulatory body for the Securities Industries responsible for the establishment of the Stock Exchange, and also the formation of a fair, efficient, and transparent market in Myanmar.
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