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It was moment of good news for Nigeria; it has been mentioned and addressed as the top five countries in Africa continent that have embrace, adopted and domesticated corporate governance principles from the Organisation for Economic Cooperation and Development (OECD).
The revelation was interpreted in a survey of 15 African countries by KPMG and the Association of Chartered Certified Accountants, while South Africa was ranked number one, having adopted the largest number of OECD Principles of Corporate Governance released in 2015.
The survey analysis was tagged: ‘Balancing Rules and Flexibility for Growth,’ focused on 15 countries across Africa and examined the corporate governance requirements for listed companies against the benchmark across four tenets of corporate governance.
The analysis was laid in a disclosed statement by the ACCA, that Kenya, Mauritius, Nigeria and Uganda completed the top five countries and about 10 out of 15 countries had aligned their corporate governance requirements with more than 80 per cent of OECD principles.
While the rest 10 Africa countries examined in the study were Egypt, Ethiopia, Ghana, Malawi, Morocco, Mozambique, Rwanda, Tanzania, Tunisia and Zambia.
It was further disclosed by ACCA that the tenets derived from the OECD principles were leadership and culture, strategy and performance, compliance and oversight, and stakeholder engagement.
That the “Most countries across Africa have robust corporate governance codes of practice at present, as economic prosperity increases across the continent. Governance requirements are assessed based on their clarity and completeness of content, degree of enforceability and availability of relevant requirements.
“While one-third of the countries studied by KPMG and ACCA have recently reviewed their corporate governance codes, now could be the right time for others to take stock and make improvements, given the impetus of the new OECD Principles and the need to encourage more foreign direct investment.”
The study analysis found that all 15 African markets had a corporate governance code or equivalent in place, with most countries adopting their first codes from 2000 onwards.
The Partner and Head of Risk Consulting, KPMG Singapore, Irving Low, was quoted that “A number of countries have had corporate governance codes for some time and the experience of implementing them has created practical learning points. The African markets will be able to leverage the lessons learned in the evolution of similar codes in other markets.
“We hope this study can contribute to raising the standard of corporate governance requirements across Africa. Each market needs to consider their specific political, legal, economic, social and cultural environment when making decisions about developing, defining and enforcing corporate governance requirements.”
Looking at the comparison within this study, and from phase one of the same report, which looked at 25 markets globally, Irving added, “Implementing corporate governance well will prepare companies for the opportunities that come with the anticipated high growth rates of the African markets.”
Speaking about the findings in relation to Africa’s development, Director, Sub-Saharan Africa, ACCA, Jamil Ampomah, said, “As these markets grow and evolve, more awareness and effort will be needed to strengthen the remaining critical areas of corporate governance, particularly for remuneration structures, performance evaluation, risk governance, and board composition and diversity.
“Achieving the right balance between rules and flexibility is a tricky task for any country, but of fundamental importance for those where corporate governance is critical to support robust economic growth.”
“Most markets mandate the basic corporate governance requirements such as financial disclosure, shareholders’ rights and the role of the board, supplementing these with non-mandatory guidelines for good practice.