2017年-世界发展银行全球_Survey_Says____Corporate_Governance_Matters_to_Investors_in_Emerging_Market_Companies_16页_615kb

Summary of "Survey Says…" – Corporate Governance Matters to Investors in Emerging Market Companies

Core Content

This study explores the importance of corporate governance in the investment decisions of emerging market investors. Conducted in April-May 2010, the survey interviewed 29 investment decision-makers from firms investing in publicly-held companies in emerging markets. The findings reveal that corporate governance is a critical factor influencing investment behavior, with investors willing to pay a premium for better governance. The study also highlights the unique governance concerns in emerging markets, which differ from those in developed markets due to weaker institutional frameworks and more opaque ownership structures.

Main Findings

1. Corporate Governance is a Critical Factor in Emerging Market Investment Decisions

• All 29 respondents emphasized the importance of corporate governance in their investment decisions.
• Governance is part of the pre-investment due diligence process.
• Larger firms with more resources tend to use more formal and standardized governance assessment methods.
• Some investors employ a staged investment strategy, starting with fund investments before committing to direct investments.

2. Investors Are Willing to Pay a Premium for Better-Governed Firms

• 100% of respondents said they would pay a higher premium for good governance in emerging market firms than in developed market firms.
• More than half (55%) would pay at least 10% more for a well-governed firm, while 38% would pay at least 20% more.
• A few respondents suggested they might pay up to a 40% premium for superior governance.

3. Firm-Level Governance Can Offset Country-Level Governance Weaknesses

• Emerging market investors believe that strong firm-level governance can compensate for weaker national governance systems.
• Investors look favorably on firms that outperform governance norms in their respective countries.

4. Poor Governance Deters Investment

• Investors are unlikely to invest in firms with poor governance.
• They expect steep discounts for poorly governed companies and avoid those with deeply problematic governance structures.

5. Transparency is a Key Concern

• Lack of transparency is a major red flag for emerging market investors.
• Disclosure of financial and operational information is highly valued, with 100% of respondents considering it very important.
• Investors also place high importance on the motivations of the controlling group and the willingness of senior management to meet with shareholders.

6. Board Independence is a Lower-Level Concern

• Board composition, particularly the presence of independent directors, is not considered as important as other governance factors.
• This is due to the common presence of a controlling group (family or government) in emerging market firms, which often appoints board members, making board independence less impactful.

7. Financial Crisis Increased Governance Importance

• The global financial crisis of 2008–09 heightened the focus on corporate governance among investors.
• Many investors expressed concerns about corporate governance in China and Russia, with some reducing or pulling out investments due to governance issues.

8. Governance Reforms Could Improve Investment Climate

• Investors suggested reforms in investor protection laws and contract enforcement could enhance the attractiveness of emerging markets.
• Specific reforms, such as reducing opacity in China and improving judicial and bureaucratic efficiency in India, were highlighted as beneficial.

Key Governance Factors

*Does not sum due to rounding.

Specific Governance Characteristics of Interest

Study Approach and Context

• The study focused on the perspectives of investment decision-makers rather than financial data alone.
• It aimed to fill a gap in the literature by examining governance considerations in major emerging markets.
• Investors often rely on local professionals with experience in both emerging and developed markets to understand local business practices and governance issues.

Conclusion

The survey underscores the growing importance of corporate governance in emerging market investment decisions, especially in the wake of financial crises. While governance is a central concern, the specific attributes that matter most differ from developed markets. Transparency, disclosure, and the motivations of controlling shareholders are key, while board independence is a lower priority. The findings suggest that governance reforms could significantly enhance the investment appeal of emerging markets.