A network that could eventually give birth to a standardized Pan African corporate governance framework is shaping up.
This is after the Institute of Directors in Southern Africa (IoDSA) and the Mauritius Institute of Directors convened a collaborative network of private membership organisations concerned with governance within the African continent.
The network has so far attracted participation from nine countries. These include South Africa, Mauritius, Nigeria, Zimbabwe, Kenya, Tanzania, Malawi, Mozambique and Zambia.
“Africa is emerging as the continent of opportunity with a huge potential for growth—but to make that dream a reality, we need a continent-wide corporate governance framework,” says Ansie Ramalho, CEO of the IoDSA. “We look forward to working with our peers across Africa to build on the solid foundation of the King Reports to create a continent that is truly investor-friendly.”
The network aims to provide a platform for institutions with broadly common goals to share information and experience, and develop and implement initiatives responding to the unique challenges of the African environment. Its inaugural meeting took place on 24-25 January in Johannesburg, and was sponsored by Standard Bank.
The impetus behind the formation of this network is the link between strong corporate governance and business growth. In the aftermath of the 2008 financial crisis, it is clear that, in the words of a recent report by the Organisation for Economic Co-operation and Development (OECD), “markets need to have a robust framework of corporate governance rules and regulations that provides investors with confidence in the system and entrepreneurs with the incentives to develop their businesses”. The OECD report also emphasizes that developing and emerging markets, in particular, must have strong corporate governance in order to access to external capital.
The IoDSA initiated, manages and owns the renowned King Reports on Corporate Governance, which have become global benchmarks in responsible corporate governance. King III, in particular, introduced the concept of integrated reporting to help investors build up a complete picture of a company’s total risk profile—and its strategies for managing and mitigating that risk.
“Mauritius has already established itself as a business and outsourcing hub, and is a case study of how an African country can identify and then use opportunity effectively—and we know that a strong corporate governance framework is a vital to build a solid economy that services global clients,” says Jane Valls, Chief Executive Officer of Mauritius Institute of Directors. “There is much we can learn from each other as we develop frameworks appropriate to the conditions within each of our countries.”
Zola Stephen, Group Secretary at Standard Bank, says: “Standard Bank very much sees itself as the business bank for Africa, and so is proud to be associated with this initiative to strengthen corporate governance in Africa.”
“We believe that this network has a vital role to play in ensuring that Africa is open for business and generates foreign direct investment for its economic development.”