What We Learned about Corporate Governance and Code Development in Sub-Saharan Africa
This document is a high-level account of discussions held and conclusions reached during theroadshow. It describes 10 learnings attained over the more than two decades of experience in code development in South Africa. Under each of these learnings...
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| Format: | Brief |
| Language: | English |
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International Finance Corporation, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/141171532707172046/What-we-learned-about-corporate-governance-and-code-development-in-Sub-Saharan-Africa http://hdl.handle.net/10986/30205 |
| Summary: | This document is a high-level account of
discussions held and conclusions reached during theroadshow.
It describes 10 learnings attained over the more than two
decades of experience in code development in South Africa.
Under each of these learnings, we present the South African
experience as well as experiences shared in the various
countries where the roadshow was conducted. The purpose of
this document is to provide guidance to IFC staff,
regulators, and private institutions (such as institutes for
directors and corporate governance) for developing codes of
corporate governance in Sub-Saharan African countries and
potentially other developing economies. The objective is for
the insights shared in this document to support achievement
of the following results: a more effective process of code
development, code content that will be easier for
organizations to implement, a higher degree of commitment by
the users of the code and good governance that will result
in better outcomes for organizations as well as the
communities and countries in which they operate. This
guidance document should be read in conjunction with the IFC
Toolkit for Developing Corporate Governance Codes of Best
Practice. Before sharing the learnings, it is important to
understand the context for the application of corporate
governance in Africa. This will provide perspective on why
some of the learnings are vital. Organizations—the users of
codes of corporate governance—operate in a broader context,
which King IV calls the “triple context,” consisting of the
economy, society, and natural environment in which
organizations operate. In Africa, depending on the country,
the triple context may appear as economic and political
instability, lack of or failing infrastructure, skills
shortage, inequality, water and food scarcity due to
environmental vulnerability, and corruption. Furthermore,
the application of corporate governance is not mature in all
African countries. An IFC study on the link between
governance and corporate performance examined the degree of
African firms’ adherence to certain aspects of corporate
governance. If those foundations are weak, it is unlikely
that other areas of corporate governance could be strong.
However, it is encouraging that, taken together, the firms
scored above 50 percent on all five of the dimensions
assessed. Organizations in Africa operate in a challenging
triple context, and much work must be done to gain maturity
in the corporate governance practices they follow. Codes for
corporate governance should be cognizant of these realities. |
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