“The inherent potential conflicts between the different stakeholders in a corporate structure manifest the need for corporate governance. Over the past decade, the major Latin American markets have seen various reforms in law and regulation, along with the issuance of voluntary corporate governance codes and the setup of institutes dedicated to the advancement of corporate governance. Nevertheless, critical issues still remain, many of which have great relevance for investors in Latin American companies. At the root of corporate governance issues in Latin America lies the concentrated ownership structure of corporations and lack of market depth in the region. Consequently, shareholder rights, especially for minorities, the handling of related-party transactions, the disclosure of company information, and nomination procedures for the board of directors all gain additional importance to align the interests of majority owners and external minority investors. This report addresses these issues and points out trends in corporate governance and challenges for investors.”
The report includes quotes and contributions from Latin American corporate governance experts Sandra Guerra, Santiago Chaher, Francisco Prada, among others.
Santiago Chaher, managing director of Cefeidas Group, points out that “in countries like Argentina where investors face the additional challenge of a more actively involved public sector, corporate governance becomes of great value—for example through strategy and effective controls—as a way to better articulate the public-private sector relationship.”
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