Balancing Rules and Flexibility for Growth is a follow up study to KPMG in Singapore and ACCA’s Balancing Rules and Flexibility (2014). It holds the same aim of raising awareness of corporate governance requirements and helping markets to improve corporate governance standards.
Phase two focuses on 15 countries in Africa, and examines the corporate governance requirements for listed companies across four pillars of corporate governance. These are derived from the OECD principles and include: leadership and culture, strategy and performance, compliance and oversight, and stakeholder engagement.
The study found all 15 African markets have a corporate governance code or equivalent in place, with most countries adopting their first codes from 2000 onwards. South Africa is ranked number one amongst the markets, having adopted the largest number of OECD Principles – with Kenya, Mauritius, Nigeria and Uganda completing the top five. Overall, a majority of markets (10 out of 15) have aligned their corporate governance requirements with more than 80 percent of OECD Principles.
Having high standard corporate governance frameworks in place at national levels is fundamental. It facilitates market confidence and business integrity, and signals governments’ commitment to create credible arrangements for investors, taking their rights into consideration and providing support mechanisms that safeguard their investment.
Although decisions about developing, defining and enforcing corporate governance requirements are specific to the political, legal, economic, social and cultural environment of each market and there is no ‘one-size-fits-all’ solution, there is value in continuing to compare against internationally accepted standards of corporate governance. Having a balanced approach, which mandates core tenets and supplements these with a principles-based approach, provides an effective framework that allows companies the flexibility to establish practices relevant for their circumstances.
As Africa continues on its journey to drive economic growth, we hope this report will contribute to raising the standard of corporate governance in Africa and guiding its markets on having the corporate governance frameworks in place to allow them to evolve and adapt to the rapidly changing business environment.
The 15 countries examined in this study were Egypt, Ethiopia, Ghana, Kenya, Malawi, Mauritius, Morocco, Mozambique, Nigeria, Rwanda, South Africa, Tanzania, Tunisia, Uganda and Zambia.