Economy ExpertSpeak: Africa cannot realize growth potential without good corporate governance
Jane Valls, CEO of the Mauritius Institute of Directors (MIoD), noted that Mauritius has been ranked first for the seventh consecutive year in the Mo Ibrahim Index of African Governance (IIAG) 2013. (Image: MIoD)
Jane Valls, CEO of the Mauritius Institute of Directors (MIoD), spoke to AfricaMoney on how Africa cannot realize its growth potential without good corporate governance. She noted that Mauritius had made great strides in corporate governance since 2004 when the national Code of Corporate Governance was introduced and has been ranked first for the seventh consecutive year in the Mo Ibrahim Index of African Governance (IIAG) 2013.
Edited excerpts from an interview:
What are the key achievements of MIoD since it started operations in Mauritius?
The Mauritius Institute of Directors was incorporated in 2008 and is mandated under the Financial Reporting Act 2004 to promote Corporate Governance in the private and public sector. We are still a very young Institute of Directors, yet a very active and dynamic one, with more than 950 individual members. We provide a range of services including public and in-house training workshops, the independent Directors Register, Board Evaluations and Corporate Governance Assessments. We launched the Director Development Programme in January 2010 and our Business Ethics programme in collaboration with the Ethics Institute of South Africa in October 2010. In September 2011 we held our first International Conference on Corporate Governance & Sustainability. We launched the Directors Forum in January 2012, and in July 2013 the MIoD and KPMG set up the Audit Committee Forum.
Last October, MIoD organised an international conference on Africa Rising! in Mauritius. Can you tell us more about this event?
The Africa Rising! International Conference on “Governance for Sustainability – The Road Map for Value Creation” was hosted in Mauritius on 17-18 October 2013 in collaboration with the Institute of Directors of Southern Africa with the aim of exploring opportunities and creating sustained organisational value in Africa. It provided a platform for the exchange of knowledge, thought leadership and best practices in governance, value creation and sustainable development. Experts, both academics and practitioners, from around the globe, and especially from Africa, joined together to share their views and experiences. There were approximately 180 delegates from 17 countries.
At the Africa Rising! International Conference, you stated: “The future generations in Africa will reap the benefits of the present economic growth and the rising African prosperity, if their country makes a commitment to practice good governance at every level.” Can you elaborate on this statement?
As a result of the Africa Rising! International Conference, a Paper was published by our Conference Rapporteur, Chris Pierce, on the lessons learned. This conference confirmed that Africa is still largely an untapped continent with huge resources and is the next frontier of development. However without good corporate governance, Africans will not benefit from this development. For development to be sustainable in the long term, all stakeholders must benefit from it. That is why it is essential to embed good corporate governance practices now. Good corporate governance takes into account the interests of all the stakeholders.
The vision of MIoD is to professionalize director’s status. Where do you stand as of now on this paradigm?
The Board of Directors is the focal point of the corporate governance system and is ultimately accountable and responsible for the performance and affairs of the company. It follows that directors’ continuous professional development can only help improve directors’ performance and the ways in which companies perform in an increasingly complex and regulated business world. Since its inception in 2004, the MIoD has trained 4,000 participants in our workshops and presentations. Continuous professional development is as important for directors as for any other profession.
A key objective of the MIoD is to promote the highest standards and best practices of corporate governance. What is the institution doing to achieve this?
We do this primarily by sharing information, providing a learning platform through our public and private workshops and through the different papers that the MIoD publishes. For instance the MIoD Directors Forum has published “Best Practice Guidelines for the Appointment of Directors” and “An Ethics Guide for Boards”. In addition, we have set up two Forums – the Directors Forum, which acts as a technical and advisory committee to the MIoD, sponsored by PwC, and which focus on subjects which are of interest to directors; and the Audit Committee Forum sponsored by KMPG, which aims to build the capacity and improve the effectiveness of Audit Committees. We are also currently working towards setting up a Company Secretary’s Circle and a Business Sustainability Forum. We are also leading a private sector voluntary anti-corruption initiative with the support of the JEC, MEF and ICAC, which is called PACT (Private sector Anti-Corruption Taskforce) and which will shortly be launching an Integrity Pledge.
Do you think there is progress in terms of good governance in Mauritius? Any key instances you’d like to highlight?
There is definitely progress in Mauritius. Since the introduction in 2004 of the national Code of Corporate Governance, there has been a lot of focus on good corporate governance. The very fact that our membership at the MIOD has nearly reached 1,000 individual members and we continue to receive nearly 15 new applications a month, as well as the attendance at our workshops and the demand for our services shows that there is interest and progress. The news is filled with features on Corporate Governance. The revision of the Code of Corporate Governance this year will ensure that Mauritius stays at the forefront of good corporate governance in Africa. Mauritius has been ranked first for the seventh consecutive year in the Mo Ibrahim Index of African Governance (IIAG) 2013. To attract direct investment and be the gateway to Africa, Mauritius must maintain its No.1 position.
In collaboration with the GRI’s Africa Focal Point, the MIoD pioneered a workshop on the theme ‘Sustainability Reporting – Launch of GRI G4 in Mauritius’ in November 2013. In what ways does Sustainability Reporting help local companies to prosper and attract new investments?
It is important to realise that yesteryear’s economic model was based on two false assumptions that: 1) there were limitless resources in nature and 2) that planet earth had an infinite capacity to absorb waste. We also know that the world’s biggest problems need multi-stakeholder solutions: environmental sustainability, poverty, corruption. These problems cannot be resolved without the contribution of business and this is recognized in the Millennium Development Goals and the United Nations Global Compact.
So if society gives business access to natural resources, human capital, markets, government protections (we call this “the social contract”), then business has a “licence to operate” as long as it commits to being a good corporate citizen, making a meaningful contribution to society, treating internal stakeholders with respect and acting responsibly towards external stakeholders. So today, companies are expected to report not only on their financial results but also on their impact on society and the environment, their corporate governance and their ethics.
Mervyn King says “Integrated reporting drives behaviour” because by encouraging companies to report on these sustainability issues it obliges them to integrate these issues into their strategy and measure their impact. Shareholders and consumers also expect companies now to be more environmentally conscious and to be responsible corporate citizens. Thus Corporate Sustainability is becoming a competitive advantage and reputational differentiator, besides making good business sense. GRI provides a framework for this integrated sustainability reporting. The MIoD and its technical partner, Ecological Living in Action (ELIA), have just been appointed as a GRI Training Centre in Mauritius.
You have recently been appointed Chairman of the African Corporate Governance Network. What are the objectives and purpose of the ACGN?
The setting up of African Corporate Governance Network was spearheaded by the Mauritius Institute of Directors and the Institute of Directors Southern Africa with the support of the NEPAD Business Foundation (NBF). It was officially launched in Mauritius on the 16th October 2013 in the presence of the founding members namely the Institute of Directors from the following African countries: Kenya, Malawi, Mauritius, Mozambique, Morocco, Southern Africa, Tanzania, Uganda, Zambia and Zimbabwe as well as other collaborators including FITC Nigeria, World Bank, IFC, Standard Bank, ACCA and Ernst & Young. The Institute of Directors of Nigeria has since joined in February. The ACGN was formed to develop institutional member capacity for enhancing corporate governance practices for building better organizations and corporate citizens in Africa. It will provide policymakers and market participants with an important forum to exchange experiences and best practices aimed at addressing ongoing corporate governance challenges in Africa. The objectives of the ACGN are to exchange and share knowledge, information, best practices tools and resources, demonstrate good practice within member organizations to achieve their goals, create a common platform for advocacy, initiatives and communications, expand the network, create a favorable investment climate and conduct research.
Finally, please provide your views on the way forward for good governance in Mauritius.
The National Committee on Corporate Governance is undertaking this year a revision of the Code of Corporate Governance and this will be an opportunity to review the Code and bring it up to date with the latest global best practices. I believe the way forward is to build on the progress that has been made so far and encourage more independent directors on boards, the continuous professional development of directors, board evaluations, more emphasis on developing ethical and sustainable business cultures, and greater shareholder engagement.