Corporate Governance in Emerging Markets: Key Red Flags to Watch Out for
- Impact Boards EM
- Mar 16, 2023
- 1 min read
Updated: Apr 16
March 2023
Whenever any organisation suffers a significant corporate governance failure, obvious questions arise as to who should have been in a position to know the impending risks and why corrective action was not taken to address the concerns. Ultimate responsibility for the company's stewardship and risk management rests with the board. Yet, other key individuals and functions within the organisation may also be in a position to know that the business is being poorly managed.
Numerous instances of company failures have highlighted the inadequacy of internal functions such as risk management, audit, compliance and legal. Alarm bells about the actual state of the company often come from investors and fund managers who closely follow their performance, rather than the stewards of the company.
There are several "red flags" to talk about; some key ones to highlight are lack of transparency, high leverage, aggressive revenue recognition and amortization/cost recognition of capital expenses.
On 16 March 2023, Impact Boards EM hosted an online roundtable to discuss "Corporate Governance in EM: Key Red Flags to Watch out for". The video recording is available to view for our members on our website.
Also available to view is a 5 mins video recording and presentation from Impact Boards CEO, Gregorio Saichin, where he summarises key takeaways from the panel discussion:
Key red flags in Corporate Governance in emerging market jurisdications
Actions that Boards can take to mitigate financial manipulation
Fiduciary duties: key takeaways for Board Director
