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Shareholders’ Rights Take Center Stage in Myanmar’s Corporate Governance Landscape

In a move to strengthen corporate governance practices, many countries have improved the rights of shareholders to participate in the decision-making process. In Myanmar, the new Companies Law has also aimed to enhance shareholder participation by providing them with greater opportunities to ask questions and place items on the agenda.

Public Companies Lag Behind in Shareholder Participation

According to a recent survey conducted among 11 public companies in Myanmar, only one company provides shareholders with the opportunity to place items on the agenda. The majority of respondents (10 out of 11) do not enable shareholders to vote in absentia or use electronic voting systems.

Private Companies Not Far Behind

In contrast, while all 14 private companies surveyed answered “no” to the question of enabling shareholders to vote in absentia, two private companies allow shareholders to exercise their voting rights by using a proxy.

Vote in Absentia Remains a Challenge

The survey highlights the challenges faced by public and private companies alike in implementing voting in absentia. The lack of explicit provisions in the Companies Law for absentee voting and limited infrastructure development may be contributing factors.

Electronic Voting Systems on the Horizon?

However, some experts believe that introducing electronic voting systems could be a viable solution to improve shareholder participation. With the country’s infrastructure development underway, it remains to be seen whether such systems will become a reality in Myanmar’s corporate landscape.

The survey also shed light on the importance of managing abusive related party transactions (RPTs). As corporate ownership is concentrated in Myanmar, RPTs can pose significant risks for companies. Foreign investors and regulatory bodies are likely to pay close attention to whether such transactions are conducted fairly and transparently.

Conclusion

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The survey highlights the need for further improvement in shareholder participation and corporate governance practices in Myanmar’s public and private companies. As the country continues to attract foreign investment, it is crucial that local companies adapt to international best practices to ensure transparency, accountability, and sustainable growth.