The long term success of any company is dependent on a sound strategy, competent management, valuable assets, a market for its goods and services and access to investment capital. Access to investment capital depends on many factors. However, few investors will commit substantial funds to any company which does not have a stable structure for the direction and control of the enterprise. Control means that the Board of directors and executive management must be accountable to the shareholders for the performance of the business and the stewardship of assets.
A business, which can demonstrate that it has in place the elements of sound Corporate Governance, will be seen as innovative, transparent and more attractive to potential investors. This view, in turn, will lead to easier access to investment capital. Increasingly, businesses wishing to attract foreign capital need to be aware of international developments. Organisations such as the Basel Committee of Banking Supervisors, the EBRD, the IMF and the World Bank are making pronouncements about Corporate Governance. Some international organisations are also issuing their own codes of good governance principles.
At PricewaterhouseCoopers we believe that Corporate Governance is about two things - accountability and communication. Accountability is about how those entrusted with day-to-day management of a company's affairs are held to account to shareholders and other providers of finance. The second aspect is how the company communicates that accountability to the wider world: to shareholders; to potential investors; to employees; to regulators; and to other groups with a legitimate interest in its affairs.
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