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Sound corporate governance will help African business flourish

It’s said that the importance of good corporate governance in business should no longer be ignored, as companies which adopt best practices are more likely to be profitable and sustainable.
AMSCO (the African Management Services Company) is promoting the importance of good corporate governance and sound business ethics in Africa, with the goal of helping the continent’s businesses and public sector companies to improve their sustainability, profitability and competitiveness.

That’s the word from Abraham Lanor, regional manager for Southern Africa at AMSCO. He says that African companies need to adopt best practices in corporate governance because it makes good commercial sense.

Says Lanor: “Corporate governance is at the top of the agenda for businesses across the world. Companies in the US and Europe have been forced to adopt more rigorous governance following the accounting scandals of the early 2000s, while the topic is also assuming more importance in developing countries.

“Africa is no exception. As the continent’s businessmen seek to play a bigger role in the global economy, they are becoming aware that they need to follow best practice in corporate governance to be competitive with rivals in the rest of the world.”

What is corporate governance?


Corporate governance may be defined as the rules, structures and processes in place to direct and control a company’s relationships with its stakeholders including management, shareholders, consumers, creditors, employees, the general public, and suppliers.

The point of corporate governance is to ensure that management and majority shareholders at companies behave in a manner that balances the profit motive with the interests of minority shareholders and other stakeholders. It includes aspects such as financial transparency and disclosure; treatment of minority shareholders; organisational structure; and the structure of the board of directors.

“We advocate that companies have a separation of the chairman and CEO roles and a strong non-executive board, in line with best practices outlined in documents such as the UK’s Cadbury Report and South Africa’s King II,” says Lanor. “Other elements of corporate governance include internal and external audits, risk management, succession planning, minority shareholder rights, disclosure of information to analysts and shareholders, as well as compliance with legislation, stock exchange regulations and industry regulatory frameworks, and so on.”

“Corporate governance is not solely about complying with a legal or (voluntary or involuntary) regulatory framework, but also about doing the morally right thing,” he adds. As such, AMSCO regards issues such as health and environmental standards and hiring policies that don’t discriminate on the basis of race, gender or religious affiliation as part of sound corporate governance.

The value of best practices


Says Lanor: “African businesses, particularly SMEs, have not always understood the value of corporate governance. Adopting best practices in corporate governance can seem expensive and complicated for small businesses in a growth phase.

“However, the picture is changing as African companies start to understand that good corporate governance can be a competitive differentiator. It can help companies to attract funding from domestic and international investors – indeed, most serious investors insist on it.”

Lanor points out that companies doing business in the international market also come under pressure from their customers to show that they have good corporate governance and ethical credentials.

“There is strong evidence that companies with good corporate governance are more likely to be profitable and sustainable than ones without it. Concern for shareholders, employees, the broader community and the environment improves rather than harms profitability,” he adds.

AMSCO is helping to champion best practice in corporate governance in Africa by helping governments and business associations to establish corporate governance frameworks and by helping its client companies to put good governance processes and structures in place.

AMSCO has developed and launched corporate governance manuals of best practice in partnership with governments and business groups in Ghana, Malawi, Mozambique, Zambia and Zimbabwe. In each of these countries, it has successfully rallied support for its cause from key business leaders.

Concludes Lanor: “Many entrepreneurs recognise the value of good corporate governance but don’t have the experience or in-house resources to adopt them alone. AMSCO helps such companies to achieve their goals of improving corporate governance as part of the package of management and consulting services it offers.”
Comment
Anonymous
Corporate governance in Africa-
I a man who believes in civilisation,values,norms and standards hear you but I doubt if the recipients are hearing you therefore I believe this is the pertinent issue that Nepad through its economic/corporate governance arm should have insisted on.

I mean if a person is not even working on a business plan how do you expect that person to adopt corporate governance?The fact that people can use violence to outwit their competitors is indicative of the fact that corporate governance is anathema .

I just want to part with some facts pertaining to what corporate governance is all about.

Corporate governance is the set of processes,customs,policies,laws and institutions affecting the way a corporation is directed,administered or controlled.Corporate governance also includes the relationships among the many players involved{the stakeholders}and the goals for which the corporation is governed.The principal players are the shareholders,management and the board of directors.Other stakeholders are employees,suppliers,customers,banks and other lenders,regulators,the environment and the community at large.

Corporate governance is a multi-faceted subject.An important theme of corporate governance deals with issues of ACCOUINTABILITY AND FIDUCIARY DUTY,essentially advocating the implementation of guidelines and mechanisms to ensure good behaviour and protect shareholders. Another key focus is the ECONOMIC EFFICIENCY VIEW,through which the corporate governance system should aim to optimize economic results,with a strong emphasis on shareholders welfare.There are yet other sides to the corporate governance subject,such as the STAKEHOLDER VIEW,which calls for more attention and accountability to players other than the shareholders.
Posted on 3 Apr 2007 14:48
Anonymous
Ojectives,Background and concepts-
OBJECTIVES

tHE PURPOSE OF THE WORLD pROGRAMME OF ACTION CONCERNING DISABLED PERSONS IS TO PROMOTE EFFECTIVE MEASURES FOR PREVENTION OF DISABILITY ,REHABILITATION AND THE REALIZATION OF THE GOALS OF "FULL PARTICIPATION "OF DISABLED PERSONS IN SOCIAL LIFE AND DEVELOPMENT ,AND OF "EQUALITY".tHIS MEANS OPPORTUNITIERS EQUAL TO THOSE OF THE WHOLE POPULATION AND AN EQUAL SHARE IN THE IMPROVEMENT IN LIVING CONDITIONS RESULTING FROM SOCIAL AND ECONOMIC DEVELOPMENT.tHESE CONCEPTS SHOULD APPLY WITH THE SAME SCOPE AND WITH THE SAME URGENCY TO ALL COUNTRIES,REGARDLESS OF THEIR LEVEL OF DEVELOPMENT.

BACKGROUND


MORE THAN 500 MILLION PEOPLE IN THE WORLD ARE DISABLED AS A CONSEQUENCE OF MENTAL,PHYSICAL OR SENSORY IMPAIRMENT .THEY ARE ENTITLED TO THE SAME RIGHTS AS ALL OTHER HUMAN BEINGS AND TO EQUAL OP[PORTUNITIES.tOO OFTEN THEIR LIVES ARE HANDICAPPED BY PHISICAL AND SOCIAL BARRIERS IN SOCIETY WHICH HAMPER THEIR FULL PARTICIPATION.bECAUSE OF THIS,MILLIONS OF CHILDREN AND ADULTS IN ALL PARTS OF THE WORLD OFTEN FACE A LIFE THAT IS SEGREGATED AND DEBASED.

AN ANALYSIS OF THE SITUATION OF DISABLED PERSONS HAS TO BE CARVED OUT WITHIN THE CONTEXT OF DIFFERENT LEVELS OF ECONOMIC AND SOCIAL DEVELOPMENT AND DIFFERENT CULTURES.EVERYWHERE, HOWEVER,THE ULTIMATE RESPONSIBILITY FOR REMEDYING THE CONDITIONS THAT LEAD TO IMPAIRMENT AND FOR DEALING WITH THE CONSEQUENCES OF DISSABILITY REST WITH GOVERNMENTS.tHIS DOESN`T WEAKEN THE RESPONSIBILITY OF SOCIETY IN GENERAL,OR OF INDIVIDUALS,OR OF ORGANIZATIONS.gOVERNMENTS SHOULD TAKE THE LEAD IN AWAKENING THE CONSCIOUSNESS OF POPULATIONS REGARDING THE GAINS TO BE DERIVED BY INDIVIDUALS AND SOCIETY FROM THE INCLUSION OF DISABLED IN EVERY ARE OF SOCIAL,ECONOMIC AND POLITICAL LIFE.
Posted on 4 Apr 2007 09:57
Anonymous
Objectives,Background and concepts-
...economic and political life.

Governments must also ensur that people who are made dependent by severe disability have an opportunity to ahieve a standard of living equal to that of their fellow citizens.Non-governmental organisations can,in different ways,assist governments by formulating needs,suggesting suitable solutions and providing services complementary to those providede by governments.Sharing of financial and material of resources by all sections of the population,not omitting the rural ares of developing countries,could be of major significance to disabled persons by resulting in expanded community services and improved economic opportunities.

In many countries,the prerequisite for achieving the purposes of the Programme are economic and social developmen,extended services provided to the whole population in the humanitarian area,the redistribution of resources and income and an improvement in the living standards of the population.It is necessary to use ecvery effort to prevent wars leading to devastation,catastrophy and poverty,hunger,suffering,diseaces and mass disability of people,and therefore to adopt measures at all levels to strengthen international peace and security,to settle all international disputes by peaceful means and to eliminate all forms of racism and racial discrimination in countries where they still exist,It would also be desirable to recommend to all States Members OF THE United Nations that they maximize the use of their resources for peaceful purposes,including prevention of disability and satisfaction of the needs of diabled persons.All forms of tecnical assistance that help developing countries to move towards therse objectives can support the implementation of the Programme.The realization ofthese objectives will,however,require extended periods of efforts,during which the number of diabled persons is likely to increase.Without effective remedial action,the consequences of disability will add to the obstacles to development.Hence,it is essential that all nations should include in their general development plans immediate measures for the prevention of disability,for the rehabilitation of disabled persons and for the equalisation of opportunities.
Posted on 4 Apr 2007 10:34
Anonymous
World programme of action-
Our think tanks should have been the ones to implement the world programme of action in cahoots with international think tanks independently of government but it seems they are there to generate an income and further their narrow-minded political views since all of them are politically active and if you`re not a political friend they do not correspond with you and to me this is in contradiction of their mandate which is to;transform ideas {that comes from us}and problems into policies;play a mediating function between the government and the public;serving as an informed and independent voice in policy debates and mobilising resources to address political,social and/or economic problems.

These think tanks are the HSRC,IDASA,SAIRR,CDE,FMF,CPS AND Nelson Mandela,De Klerk,Helen Suzman Foundations and section 9 companies.Now,they have left everything to the government and just nod government skewed and twisted shortcoming plans.
Posted on 5 Apr 2007 15:58

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