Azerbaijan can become a regional leader on corporate governance
Azerbaijan, Baku, Dec 23 /Trend H.Hasanov/
Azerbaijan may take a lead position in the region in terms of corporate governance if it continues to develop this area actively, the head of the International Finance Corporation (IFC) Caroline Bright said on Thursday at the presentation of the results of a project to improve corporate governance in Azerbaijan (ACGP).
"It is important that Azerbaijani companies continue to work in this direction and share their experiences with others after the completion of this project," Ms Bright said.
She went on to say there are positive trends in the banking and private sectors in implementing corporate governance standards according to research by the IFC in 2005.
As high as 97 per cent of companies surveyed reported an improvement of corporate management experience since 2005, over 80 per cent reported the strengthening of the internal system, 70 per cent an increase of the effectiveness of the supervisory board and more than 50 per cent began to use the internal audit reports, or develop this process.
It was noted in the survey that more than 30 companies have been able to attract investment by improving their experience in the field of corporate governance and more than 50 per cent were able to reduce risk and improve their reputation.
Independent auditing companies prepare the financial statements of 73 per cent of respondents and 49 per cent have adopted this practice over the past six years.
The IFC also supports greater transparency and openness in Azerbaijani commerce. The results showed that 76 per cent of respondents comply with International Financial Reporting Standards (IFRS), whereas there were 14 per cent in 2005 and 65 per cent have begun to apply these standards, or to bring them into line in the last six years.
The positive fact is that all the banks participating in the survey in the financial statements adhere to the IFRS and whereas the figure was 53 per cent in 2005, this figure by the joint venture firms is 40 per cent and limited liability, 57 per cent.
"With these results Azerbaijan can confidently export its experience overseas. Such training on corporate governance in the country was generally not given although the IFC organised meetings with university professors, bank managers and large and medium investors prior to 2005," Ms Bright said.
She added that corporate governance practices are taught in the five of the country's universities.
Deputy Chairman for the State Committee for Securities Ilgar Muradov noted that the ACGP programme has also allowed the use of various resources more efficiently which in turn promotes investor interest in the country. The level of standards has increased due to the programme and more high-quality approaches to business show better thinking.