IFC and Laos work to improve corporate governance
IFC and Laos work to improve corporate governance
International Finance Corporation (IFC), a member of the World Bank Group, and Lao Securities Commission Office signed a memorandum of understanding to improve corporate governance, which will strengthen the country's capital markets and boost sustainable growth.
The MOU was signed yesterday in Vientiane between Acting General Secretary of Lao Securities Commission Office, Mrs Saysamone Chanthachack and the IFC Office Head in Laos, Mr Phongsavanh Phomkong.
The ceremony was attended by Deputy Governor of the Bank of the Lao PDR, Mr Sonexay Sithphaxay, Lao Securities Exchange (LSX) CEO, Mr Vanhkham Voravong, along with officials of concerned sectors.
IFC will help the Lao Securities Commission Office conduct a country-wide corporate governance assessment to identify gaps and challenges in Laos' regulatory framework, covering areas such as shareholder rights, corporate board practices, disclosure and transparency.
This assessment will pinpoint an action plan leading to the development of a corporate governance code to establish good practice standards, with which Lao companies must comply.
“The Lao PDR needs to have a sustainable capital market that is capable of attracting companies and investors,” said, Mrs Saysamone.
“Improving corporate governance standards and practices is a prerequisite to achieving that goal, as better corporate governance helps build trust among market stakeholders. IFC's support of the Lao Securities Commission Office will help us further improve the transparency and com petitiveness of Lao public companies,” she said.
IFC will also help the Lao Securities Commission Office raise awareness among Lao companies about the importance of good corporate governance and the governance practices of their peers in neighbouring countries.
As part of the efforts to harmonise practices across its markets and promote Asean as an attractive asset class for regional and global investors, Lao companies are expected to raise the bar in corporate governance.
“Sound co rporate governance – the responsibility of stakeholders towards each other – contributes to sustainable economic development by enhancing company value and long-term growth,” said IFC Country Manager for the Lao PDR, Cambodia, and Vietnam, Mr Kyle Kelhofer.
“Our cooperation with the Lao Securities Commission Office will help raise governance standards in Laos' emerging corporate sector, improving operations and increasing transparency, making them more attractive to outside capital and investment,” he said.
IFC has contributed to the development of 48 corporate governance codes in 32 countries worldwide. In East Asia and the Pacific, IFC developed the first corporate governance manual for Vietnam companies and produced an annual corporate governance scorecard for the top 100 Vietnamese listed companies.
It has also partnered with China's Shenzhen Stock Exchange to enhance corporate board performance, and has helped Indonesia's financial services authority, OJK, develop its Corporate Governance Roadmap and Code.
IFC's support to the Lao Securities Commission Office is delivered in partnership with Switzerland's State Secretariat for Economic Affairs.
