Presentation CORPORATE GOVERNANCE – DEVELOPMENTS AND CHALLENGES Loren Wulfsohn 10 July 2006

Contents Introduction Current Developments in the region Challenges facing corporate governance reform in Africa Conclusion

Introduction “Governance in any context reflects the value system of the society in which it operates. Accordingly, it would be pertinent to observe and to take account of the African worldview and culture in the context of governance of companies in South Africa.” King Report on Corporate Governance for South Africa 2002 (King II)

African context Unique circumstances Governance & Sustainable development Governance & socio-political development Preponderance of state owned enterprises

Work done in the region NEPAD NEPAD –Commitment to eradicating poverty through sustainable growth and development –Declaration on democracy, political economic and corporate governance –Approved codes and standards

NEPAD Business Foundation –Leading business organisations –Develop best practice standards of corporate governance throughout Africa Work done in the region NEPAD

African Peer Review Mechanism (APRM) –Self-monitoring mechanism –Voluntary accession –APRM process Work done in the region APRM

Other Codes -Equator Principles -Global Reporting Initiative -Global Compact -Extractive Industries Transparency Initiative

Pan African Consultative Forum on Corporate Governance (PACFCG) Purpose: Raise awareness of the significance of corporate governance Forge consensus on concepts and methods of corporate governance Develop action plans for the implementation of good corporate governance standards Contribute to and learn from the global policy dialogue on corporate governance Work done in the region PACFCG

East and Southern African Regions Sub-Regional Organisations –Common Market for Eastern and Southern Africa (COMESA), –East African Community (EAC), –Southern African Development Community (SADC), and –Eastern Central and Southern African Federation of Accountants (ECSAFA)

COMESA

EAC

SADC

ECSAFA

Challenges facing corporate governance reform in Africa Corruption Regulatory issues Inactive shareholders State owned enterprises Board weakness One-size fits all governance codes “Professional” bodies HIV/AIDS

Role of private and public sector Development is largely about enabling private investment and entrepreneurship to secure sufficient and equitable growth for people to have a hope for a better future. But economic change can not be separated from social change. Business and society must walk hand in hand. George Kell, UN, The UN Global Compact: Concepts, Achievements, Future

Value of partnerships – private and public Reform measures need to be put into place Political buy-in for reform programmes Corruption is a huge issue Culture of disclosure and transparency aligned to international standards Conclusion

Thank you