Good corporate governance is vital for business in developing countries seeking to attract investment and thereby strengthen their economies. IOD therefore believes that good corporate governance:
- Increases access by firms to external financing by which can lead to higher investment, higher growth, and the creation of more jobs;
- Lowers the cost of capital and raises the value of the firm, making investments more attractive which in turn can lead to more and sustainable wealth creation;
- Produces better operational performance through better allocation of resources and better management;
- Reduces the risk of financial crises which can have devastating economic and social impacts;
- Leads to better relationships with all stakeholders and thus improves labour relations as well as environmental protection;
Good corporate governance therefore encourages companies to create value (through entrepreneurship, innovation, development and exploration) and provides accountability and control systems commensurate with the risks involved.
Click here to view the Malawi Code II |
