The US has experienced its fair share of exposed failure in corporate governance structures, which has sent ripples through the capital markets in developed countries. When this happens, the spotlight moves on to the lesser-developed countries and their governance practices.
Let’s use Egypt as an example, since last week I looked at India. Think about the recent political uprising there: how will this affect the country’s current and future governance principles?
It can be seen that, over the years, corporate governance made its way into Egypt’s business life and has become an area of focus for the country’s foreign and local investments. A few days ago, the Egyptian Institute of Directors published a revised edition of its corporate governance code for the private sector, which was last updated in 2005. According to the institute, the modifications are ‘based on the latest Egyptian and international experiences’.
At the same time, the International Monetary Fund (IMF) has been urging Middle Eastern countries to ensure economic growth benefits everyone, rather than just a selected few. Recently, Masood Ahmed, director of the IMF, came forward to share his thoughts on this topic while stressing the importance of a rigid governance infrastructure in the developing nation.
‘These events have brought into sharp focus the need for more inclusive growth and better governance,’ Ahmed said in a Reuters article.
Better governance? How can a country overcoming years of oppression achieve this? What can foreign investors do to help Egypt stand its ground again?
My thoughts are still fluid. But I suggest that the organisations calling for ‘better governance’ might want to lend a hand to the country by creating a socially responsible investment environment that can meet international standards and encourage global corporate citizenship.