Latin American Corporate Governance Roundtable: Key Takeaways

The Latin American Roundtable on Corporate Governance met in Lima, Peru on 29-30 November, 2011, bringing together policy-makers, regulators, stock exchanges, corporate governance institutes and private sector stakeholders from 16 countries.



Download the detailed agenda and background information.

Key highlights included:

A Peru task force formed to consider the Roundtable's White Paper on "Strengthening Latin American Corporate Governance: the Role of Institutional Investors." It issued an action plan referencing the Roundtable's recommendations, with concrete actions to be taken by institutional investors, the stock exchange and regulators to strengthen Peruvian corporate governance.

Roundtable participants agreed to form a task force to further analyze and develop country-specific recommendations to prevent abuse of related party transactions. Treatment of RPTs within company groups will be a particular area of focus.

A new Roundtable survey on board nomination, election and conflicts of interest revealed clear weaknesses in the region concerning processes to influence board composition that may impede the development of diverse and effective boards capable of objective, independent judgement.

A session with stock exchanges revealed a strong focus on reaching out to non-listed companies to promote corporate governance improvements and wider access to Latin American capital markets through education initiatives, special listing segments and partnerships with corporate governance institutes and academic programs. In periods of financial distress where access to bank credit may be limited, capital market financing may offer a viable alternative for small and medium-sized enterprises.

Another issue discussed by the Roundtable involved corporate governance of state-owned enterprises, which will be addressed through a new Latin American Network on Corporate Governance of State-Owned Enterprises. The Network met for the first time in Bogota, Colombia in September 2011, and will continue to meet annually.

In the concluding session, it was noted that the Roundtable's networks, task forces and other associated groups will have a full work program in 2012 through meetings of the Companies Circle, SOE Network, Related Party Transactions Task Force, Network of Latin American Corporate Governance Institutes, and, subject to confirmation of the Colombian authorities, a Colombian task force on corporate governance and institututional investors. To allow sufficient time and focused resources for this work to progress, it was suggested that the Roundtable move to a schedule of plenary meetings every other year, while supporting participation in other locally hosted corporate governance events.

Featuring 140 participants from both Latin American and OECD countries, the Roundtable was organized jointly by the Organisation for Economic Co-operation and Development, International Finance Corporation and Global Corporate Governance Forum, with the support of the Government of Spain. The Roundtable was co-hosted by Peru’s Superintendencia del Mercado de Valores (SMV) , the Bolsa de Valores de Lima (BVL), and Procapitales.

The Roundtable's Companies Circle, comprised of 19 leading Latin American companies with a strong commitment to good corporate governance practices, held its annual meeting the day before the Roundtable.