Argentina’s Corporate Governance Code Compliance Falls Short, Study Finds
A recent analysis has revealed that Argentina’s mandatory Corporate Governance Code is not being fully implemented by many of the country’s largest publicly traded companies. The study, which examined 20 national capital companies, found varying levels of compliance depending on factors such as company size and sector.
Compliance Levels Vary Across Companies
The research found that larger companies tend to have a higher level of compliance with the code, with some firms reporting nearly 100% adherence. However, smaller companies and those in specific sectors, such as finance, were found to be less compliant.
- Larger companies showed higher levels of compliance
- Smaller companies and those in certain sectors struggled with compliance
Areas of Consistency and Improvement Needed
Despite these findings, there are areas where all companies studied showed a high degree of compliance. For example:
- Related party transactions and audit function practices were consistently well-aligned with the code’s principles.
- Companies with higher capitalization were also more likely to prioritize business ethics, demonstrating a commitment to responsible corporate behavior.
However, one area where compliance was found to be lacking across all firms is in the principle of fairly and responsibly remunerating employees. This finding suggests that Argentina’s companies may need to do more to ensure that their compensation practices are transparent and equitable.
Recommendations for Improvement
The study’s authors say that the results highlight the importance of ongoing monitoring and enforcement to ensure that companies comply with the Corporate Governance Code, which was introduced in 2009 as a way to improve transparency, disclosure, and accountability in Argentina’s business sector. To achieve this, the authors recommend:
- Regular monitoring and enforcement of compliance
- Improved transparency in compensation practices
- Increased focus on responsible corporate behavior
By addressing these areas for improvement, Argentina’s companies can better uphold the principles of the Corporate Governance Code and contribute to a more transparent and accountable business environment.