Corporate governance scorecard 2009

The high-profile collapses of several large corporations in the past decade have created significant investor confidence gaps. Most of these scandals involved accounting fraud, which stemmed from the breach of shareholder rights protection and the lack of transparency, two pillars of corporate governance. As a consequence, corporate governance ratings have become an important element in calculating credit worthiness by investment management and credit rating institutions. In recent times, the Mongolian Government and several non-governmental organizations in Mongolia have been focused on developing better corporate governance (CG) in Mongolian companies. Several other initiatives have also taken place, such as the training of directors and journalists in CG good practices in co-operation with the International Finance Corporation (IFC). A CG scorecard is an effective tool for all stakeholders to assess companies’ fulfilment of best practice. Its concise criteria provide relevant information that can be readily compared, a valuable asset for investors evaluating portfolio holdings and new investment opportunities. Good CG helps to bridge the gap between the interest of those that run a company and the shareholders that own it, increasing investor confidence and making it easier for companies to raise equity capital and finance in the investment process.