IFC and UMFCCI sign agreement on improving corporate governance practices

04 February 2016
IFC and UMFCCI sign agreement on improving corporate governance practices
Photo: UMFCCI

IFC, a member of the World Bank Group, and the Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) signed a cooperation agreement yesterday to improve corporate governance practices among Myanmar companies to raise their competitiveness, the IFC said in a statement on 3 February. 
The signing ceremony was part of the first corporate governance forum organized by IFC and the UMFCCI. Around 400 government and business representatives attended the half-day forum in Yangon yesterday to discuss corporate governance challenges and opportunities faced by Myanmar; they also shared the latest trends and global best practices. 
“It is time to push the agenda for sound corporate governance to ensure the sustainable development of Myanmar’s emerging private sector and new stock market,” said Deputy Finance Minister Dr. Maung Maung Thein. “Better corporate governance will help build trust among market stakeholders – a prerequisite to tapping new sources of capital, which is crucial to fuel companies’ growth and expansion over the long-term. The cooperation between IFC and the UMFCCI is a key milestone in improving corporate governance standards and practices in Myanmar. We look forward to seeing good corporate governance flourish in Myanmar.” 
IFC will be helping Myanmar companies struggling with underdeveloped boards of directors, ill-defined director duties, poor transparency, rudimentary control frameworks, and inadequate shareholder practices. Many of these issues stem partly from the absence of a robust legal and regulatory framework that includes basic governance provisions and investor protections. 
“Improving corporate governance is crucial for Myanmar as the country further opens up its economy and tries to build a robust and sustainable private sector,” said Vivek Pathak, IFC’s East Asia Pacific Director. “Companies with better governance are less likely to suffer from mismanagement and they usually generate better returns for shareholders. They are therefore more attractive to investors and will find it easier to draw in capital for their growth.” 
In addition to hosting the forum, IFC will provide workshops to help the UMFCCI – a national-level nongovernmental organization representing the interests of Myanmar’s private sector – develop and deliver corporate governance training programs for companies. IFC will also train university lecturers to teach corporate governance courses to MBA students in the country. IFC and the UMFCCI will jointly organize public conferences and develop relevant materials to further raise market awareness of corporate governance. 
“The UMFCCI will work closely with IFC in providing corporate governance training to Myanmar companies and institutions to improve economic development and the investment climate,” said U Tint Swai, Chief Executive Officer of the UMFCCI. “Myanmar companies and the economy in general will benefit from improving governance, transparency, and risk management.” 
The Myanmar government is taking steps to strengthen the country’s regulatory framework by implementing the Banks and Financial Institutions Law and updating the Companies Act. These legislations aim to improve risk governance in banks, clearly define director duties, and strengthen shareholder protection. 
IFC’s Corporate Governance Program in Myanmar is implemented in partnership with the Australian Department of Foreign Affairs and Trade and the U.K. Department for International Development.