LOCAL MARKET IMPACT VS. INTERNATIONAL CG BENCHMARKS
In a bid to strengthen corporate governance (CG) practices in the Lao People’s Democratic Republic (PDR), the International Finance Corporation (IFC) has been actively promoting reforms and best practices among listed companies.
Strengthening Corporate Governance Framework
Since 2016, IFC has contributed to the reinforcement of the CG framework in Laos through various projects with financial support from the Lao Securities Commission Office (LSCO) and the Government of Japan. The CG diagnostic aimed to identify gaps in CG practices and provide a roadmap for enhancement.
Promoting Guideline Adoption
The 2019 Guidelines for CG are being actively promoted and implemented by listed companies, with a recent fact-finding survey conducted in 2020 acknowledging both advances taken by private enterprises to improve their CG efforts and challenges they face in execution.
Challenges and Opportunities
- Despite progress, important gaps remain.
- The World Bank Group’s Doing Business Report ranked Laos 179th out of 190 economies in protecting minority investors, reflecting the country’s perceived complex and opaque business environment.
- However, there is a growing demand among private sector companies to adopt the new Guidelines for CG for Listed Companies.
Future Plans
In 2021, IFC will establish a tailored CG Scorecard Assessment for Laos to measure local practices against global benchmarks. The adoption of the CG Guideline, Scorecard, and good CG practices among Lao businesses will guide enterprises to:
- Strengthen their financial and non-financial disclosures
- Improve reporting practices online and in English
- Upgrade accounting and auditing skillsets
- Raise awareness for CG policies among market participants
- Improve regulatory enforcement and compliance
Benefits
The adoption of good CG practices will ultimately accelerate the development of a respectable CG culture and a healthy capital market in Laos, increasing its attractiveness as an investment destination.
Ranking and Score: Protecting Minority Investors
Contact Us
For more information about the Lao Securities Commission Office, visit www.lsc.gov.la/EN.
IFC ESG Advisory for Asia Pacific
The IFC’s ESG Advisory for Asia Pacific is part of its ambition to broaden its influence and deepen its impact in moving the private sector in emerging markets towards sustainability. The program focuses on integrated ESG support, offering tailored advice and guidance to clients (public and private sector) in areas such as:
- Board effectiveness
- Control environment
- Family business governance
- Environmental and social performance
Partnership
The IFC’s ESG Advisory for Asia Pacific is implemented in partnership with Switzerland’s State Secretariat for Economic Affairs (SECO) and the UK Climate Change Unit (UK CCU).
Visit ifc.org/sustainability to learn more about IFC’s sustainability efforts.