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New IFC Report Urges Mongolian Companies to Improve Corporate Governance

Ulaanbaatar, Mongolia, November 21, 2013 – A new report by IFC, a member of the World Bank Group, urges Mongolian companies to improve their corporate governance in order to enhance their competitiveness and performance, attract investment, and better contribute to Mongolia’s long-term economic growth.
Entitled ‘The Corporate Governance Scorecard for Mongolia 2011’, the report is an independently produced survey of corporate governance practices in Mongolia. It finds that the average corporate governance score for Mongolia’s top 20 listed companies during 2011 was only 27.5%, indicating inadequate implementation of the country’s corporate governance rules and regulations.
The report urges businesses to improve in key areas such as protecting the rights of shareholders and stakeholders, improving companies’ disclosure, transparency and governance structure, and making boards accountable for company decisions.
“Businesses should raise their awareness of good corporate governance, which paves the way for more investments at lower costs,” said Mongolia’s Financial Regulatory Commissioner Ganbayar Davaa. “The goal of the scorecard is also for the authorities to identify strengths and weaknesses in the corporate governance framework, leading to further regulatory reforms.”
The report reviews the corporate governance practices of the 20 largest companies by market value listed on the Mongolian Stock Exchange as of January 3, 2011, which together represent nearly 90% of the Exchange’s total market value. It aims to develop a benchmark of corporate governance practices by examining compliance with local laws and regulations and global best practices.
“Firms with better governance are more profitable than those with poor governance,” said Tuyen Nguyen, IFC’s resident representative in Mongolia. “We hope the scorecard will encourage more Mongolian firms to follow better corporate governance practices. This will help them with more efficient management, better allocation of resources, and more sustainable value creation, which will eventually contribute to the country’s long-term economic growth.”
This is the first corporate governance scorecard produced as part of the IFC Mongolia Corporate Governance Project, which was launched in 2009 in cooperation with the Financial Regulatory Commission of Mongolia.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org .
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