22 May 2019
MYANMAR: Improved Corporate Governance Standards to Boost FDI
In a bid to improve corporate governance and transparency in Myanmar, the government is planning to introduce a Corporate Governance Code (CGC) by 2020. Once implemented, the CGC is expected to boost investor confidence and draw more foreign direct investment (FDI) into the country.
Corporate governance standards in Myanmar are relatively lower than those in some other countries in the ASEAN bloc. According to a Corporate Governance Scorecard recently released jointly by Myanmar’s Directorate of Investment and Company Administration (DICA), the Securities and Exchange Commission of Myanmar (SECM), the Yangon Stock Exchange, and the International Finance Corporation, Myanmar companies scored an average of 30% compared with the ASEAN average of 69%. It must be noted, however, that the assessments for the report were carried out prior to the implementation of Myanmar’s new Companies Law last year, which seeks to boost transparency and corporate governance in the country.
According to a senior official at the country’s newly established Ministry of Investment and Foreign Economic Relations, the CGC is being drafted jointly by the DICA, SECM, and the Organisation for Economic Co-operation and Development (OECD). The draft CGC is expected to be unveiled for public comments by the end of this year.
The CGC drafting process is seen as a natural follow-up to the implementation of the Companies Law. The government has accordingly advised businesses to prepare for tightened corporate governance standards in the lead up to the introduction of a formal CGC.