By Nyein Nyein
If the corporate governance of public and listed companies is strong, they would find it easy to access capital from banks and get shareholders to trust and invest in them, said U Aung Naing Oo, Permanent Secretary of the Ministry of Investment and Foreign Economic Relations.
“Shoddy corporate governance could yield unexpected results for companies. Poor governance comes with high risk. Naturally, investors trust companies with good corporate governance because such companies have low risk of running into losses. Our people do not have much awareness about corporate governance. So, they are not able to analyze the market potential (of companies) and are not very willing to purchase shares. We have faced many similar situations. Once the corporate governance regulations are published, there will be good access to financing for companies. Additionally, public investors, banks, and other investor organizations would be able to easily evaluate the financial performance of companies,” said U Aung Naing Oo.
Therefore, the Advisory Committee on Corporate Governance Reform will publish corporate governance regulations for public and listed enterprises in April.
“Corporate governance will help listed companies and public companies to regulate their management to ensure compliance with the best governance practices along with transparency and accountability. Once the regulation is instituted, all companies will have to comply with them,” according to the Advisory Committee on Corporate Governance Reform. “Corporate governance is related to access to financing. When an enterprise tries to get financial support from banks, they look at how good the firm’s corporate governance is. Earlier, there was no proper corporate governance in companies, and banks also found it difficult to analyze how companies were being managed. Now, corporate governance regulations will ease access to financing,” said U Aung Naing Oo. “Currently, public and listed companies may be facing certain challenges in complying with the corporate governance regulations. The main challenges involve shareholders being unaware of their rights, weaknesses in transparency, and little awareness about the role of directors,” he added. Therefore, corporate governance will be promoted step by step at public companies and listed companies. This would include conduct of discussions and awareness programmes and distribution of director’s handbooks. In addition, the Myanmar Institute of Directors would be formed, and training courses on the responsibilities of directors would be provided.
Myanmar drafted the corporate governance regulations in cooperation with the Organization for Economic Co-operation and Development (OECD) in 2013. The Advisory Committee on Corporate Governance Reform was formed in 2018 and, it started functioning in January, 2019. (Translated by Hay Mar)
By Nyein Nyein