Corporate Governance : Success Stories in Europe and Central Asia
Emerging markets are becoming important engines of global growth. These markets, such as the transition economies in Europe and Central Asia, are viewed with increasing interest by foreign investors as private sector participation grows, as regulat...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/06/24606692/corporate-governance-success-stories-europe-central-asia http://hdl.handle.net/10986/22061 |
| Summary: | Emerging markets are becoming important
engines of global growth. These markets, such as the
transition economies in Europe and Central Asia, are viewed
with increasing interest by foreign investors as private
sector participation grows, as regulatory reforms take
effect, and as individual firms focus on elevating their
business practices to align with international standards. In
fact, foreign direct investment inflows to transition
economies increased by 28 percent to reach $108 billion in
2013, according to the United Nations Conference on Trade
and Development. Sound corporate governance is a critical
element in helping these emerging markets meets their full
economic potential. Good corporate governance, defined as
the structures and processes by which companies and banks
are directed and controlled, helps firms operate more
efficiently, improves access to capital, mitigates risk, and
safeguards against mismanagement. Good governance also
facilitates appropriate consideration of other critical
issues for enterprises, including environmental and social
responsibility. It is the foundation for long-term business
growth and sustainability, adding value for investors and
contributing lasting dividends for economies. Companies and
banks, particularly those in emerging markets that are
focused on improving their corporate governance can look to
a growing body of evidence that such efforts matter,
yielding bottom line benefits, reputational enhancements,
and competitive differentiation. In one study of note, the
Emerging Market Investor Survey, 100 percent of the
investors interviewed said they will pay a higher premium
for good governance in an emerging market firm than what
they would pay for a similar firm in a developed market. As
companies and banks in Europe and Central Asia find their
place on the world’s economic stage, efforts to enhance
governance practices are helping them reduce their business
risks, improve performance, and set the course for long-term
success and profitability. |
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