Ulaanbaatar, Mongolia, June 24, 2014—IFC, a member of the World Bank Group, today introduced the newly approved Mongolian Corporate Governance Code in an effort to enhance the performance and competitiveness of Mongolian companies.
Adopted by the country’s Financial Regulatory Commission last month, the Mongolian Corporate Governance Code addresses Mongolia’s most common corporate governance issues, including abuse of shareholders’ rights, disclosures to shareholders, and checks and balances between governance bodies.
“Firms with better governance are more sustainable and profitable,” said Mongolia’s Financial Regulatory Commissioner and head of National Corporate Governance Council Ganbayar Davaa. “We hope the adoption of the code will encourage more Mongolian firms to improve their corporate governance practices. In turn, this will lead to more efficient management, better allocation of resources, and more sustainable value creation, which will contribute to the country’s long-term economic growth.”
IFC partnered with the Financial Regulatory Commission to develop this set of standards, which was introduced to Mongolia’s business community during the seventh annual Corporate Governance Forum.
“Companies with good corporate governance practices can reach a higher valuation and attract more investors and business partners,” said Phillip Armstrong, Senior Adviser for Corporate Governance, IFC. “To establish a framework for such business practices, the Mongolian Corporate Governance Code embraces the most significant international principles of corporate governance yet also meets local requirements and conditions.”
More than 100 company directors, managers, and government officials gathered at the forum co-sponsored by IFC and the Corporate Governance Development Center. In addition to the code, the participants discussed good governance practices and the challenges faced by Mongolian companies and banks.
IFC, together with the Financial Regulatory Commission and the Corporate Governance Development Center, released the first Mongolian Corporate Governance Scorecard, an independent survey of corporate governance practices, in November last year. The Scorecard found that the average corporate governance score for Mongolia’s top 20 listed companies is only 27.5 percent, indicating existing corporate governance rules and regulations are insufficiently implemented.
Based on the findings of the Scorecard, IFC and the Mongolian government have developed several initiatives to improve the country’s corporate governance framework, including developing the code.
In partnership with Japan and the Netherlands, IFC’s Mongolia Corporate Governance Program has organized training and consultations for more than 330 joint-stock companies and banks since 2009.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY13, our investments reached an all-time high of more than $25 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.
The Financial Regulatory Commission is a government regulatory agency. It strived to ensure the stability of the financial market, regulates financial service institutions, monitors the implementation of all relevant legislations, and protects the rights of investors and participants of the financial markets. It actively cooperates with all domestic and international organizations, foster healthy collaboration with all stakeholders in the non-banking financial sector. For more information, visit www.frc.mn.