Presentation of White Paper
Thursday, June 19, 2003
The Organisation for Economic Cooperation and Development’s White Paper on Corporate Governance for South Eastern Europe, was launched at a conference organized by the Macedonian Stock Exchange and the Securities and Exchange Commission, with the support of USAID. The White Paper was almost two years in the making. It was drawn up through a Roundtable on Corporate Governance in South Eastern Europe which involved experts and practitioners from across the region; they looked at ways that their working practices, and their countries’ economies, could be improved with good corporate governance. Underlying the whole document is an awareness that corporate governance practices in South Eastern Europe must improve if efficient capital markets are to be developed and if a sound climate for investment is to be established in the region. No one country is singled out for special comment; Macedonia needs to look at all its practices in order to attract investment. The White Paper lays out key priorities for the region and then examines five areas which are internationally recognized as central to corporate governance: shareholder rights, stakeholder rights, transparency and disclosure, boards of directors and methods of enforcement. The White Paper urges that:  regulatory authorities be strengthened. This is to ensure that the laws which countries, including Macedonia, have are implemented and are enforced. This will involve increasing the capacity and the authority of the regulatory authorities and strengthening the judicial system;  the private sector commit itself to good corporate governance. Unless the private sector accepts the responsibilities of good corporate governance it will not reap the benefits, which include increasing access to capital and improvements in the company’s performance. The business community should be central in driving reforms for good corporate governance;  training be developed for all players involved in corporate governance. Whether by professional organizations or through a company’s in house training program resources should be committed to training people to improve corporate governance standards. This will help lead to international standards and practices;  minority shareholders be protected. The abuse of minority shareholders’ rights is, according to the White Paper, one of the most severe weaknesses of corporate governance practices in the region. But the protection can only be effective with strong monitoring and enforcement by the regulatory authorities;  boards of directors are reinforced. Boards of directors are central to the functioning of corporate governance as they are the link between managers and shareholders. However in South Eastern Europe their role is often unclear or not implemented. Board members need to better understand their roles and duties as and then have the resources to carry out those responsibilities;  the region moves towards international standards for accounting, auditing and disclosing information. By adopting international standards the information which is disclosed will be comparable across the region as well as internationally. It is recognized this will be difficult to achieve but should be supported politically and financially. In all the white paper provides 48 recommendations to be considered by stakeholders in the region, over and above the key urgent issues it presents. The final recommendation is that the OECD Roundtable on Corporate Governance which led to the document, continue to meet in order to support progress across the region. In hosting the Skopje conference, the MSE and the SEC have highlighted their commitment to the recommendations laid down in the White Paper. Both organizations acknowledge that it will take some time for them to be put into effect but hope that the one day event will both encourage dialogue about the issues as well as commitments from other players in the Macedonian economy for improvement and reform.