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|YPC Conducts Study on Corporate Governance|
Al-Anesi ( YEMEN POST STAFF )
Article Date: October 13, 2008
Yemen Polling Center (YPC) started implementing a comprehensive survey on companies and economic Yemeni establishments in preparation of a field study on 'Corporate Governance'.
Prepared in collaboration with the Center for International Private Enterprise (CIPE) and Yemeni Businessmen Club, the study seeks to investigate the extent to which this program can be applied in Yemen.
The study will target officials and decision makers in more than 250 companies and establishments in public, mixed and private sectors and will be conducted by 12 researchers of both sexes in five provinces, namely Sana'a, Taiz, Aden, Al-Hodeidah and Hadramout.
'Corporate Governance' is considered nowadays a basic mechanism for improving the performance of companies and advancing development of democratically-reinforced market. It is made through the companies run by board of directors whose task is to safeguard the financial interest of share and stakeholders.
The principals of this model aim to raise the value to its maximal limit over the long term through improving decision-taking process, good governance and performances in these companies.
Applying these principles in small and middle-sized enterprises or family-owned companies would help reinforce efficiency, reduce conflicts of interests, and ensure smooth transfer of ownerships from parents to their heirs.
According to an international study, 84 percent of world investors will pay more for shares and equities of companies with strong corporate governance than they do for companies with similar financial positions yet with weak corporate governance.
Key elements of good corporate governance principles include protecting stakeholders, encouraging financial disclosure and transparency, honesty, trust and integrity, openness, performance orientation, responsibility and accountability, mutual respect, commitment to the organization and separation of ownership from management.
Among the advantages of corporate governance for society are encouraging investment and sustainable development, fighting corruption, reinforcing the competitiveness, motivating productivity and innovation, reinforcing efficiency and reducing extravagance, stabilizing financial markets, developing capital markets, reinforcing transparency between state and private sector as well as strengthening the confidence of people.
The key advantages of corporate governance are reinforcing the performance of companies, reducing capital costs, improving the company's fame and strategy, building relations with stakeholders (partners), protecting the rights of investors, reducing risks, and increasing liquidity.