Publication: Corporate Governance Country Assessment : Colombia
Date
2003-08
ISSN
Published
2003-08
Author(s)
World Bank
Abstract
This report assesses the corporate
governance policy framework, enforcement and compliance
practices in Colombia. The capital markets are small
relative to the economy and trading volume is low equity
trading totals about USD one million, as compared to USD one
billion in fixed income trading. The corporate sector is
largely owned and controlled by family groups and
conglomerates. The challenge is to create an environment
where medium-sized companies can raise capital in the market
and help them make the transition from tightly-controlled
family firms to public companies. While pension funds
represent a large and rapidly growing source of funds, they
are reluctant to invest in equities. It has been
demonstrated across countries that capital market
development correlates positively with the degree of
shareholder protection and good corporate governance.
Awareness of the importance of corporate governance issues
is growing. Success stories of privatizations linked with
good corporate governance highlight the importance of the
issue. Colombia is an interesting example of the interplay
between legal changes and voluntary initiatives based on the
incentive to attract capital. It has put a minimum corporate
governance disclosure regime in place for companies that
wish to be eligible for pension fund investments. The report
recommends (i) the adoption of a securities bill as proposed
by the securities regulator supevalores; (ii) the adoption
of International Accounting Standards (IAS) and
International Standards on Auditing (ISA) and the creation
of an independent audit oversight board; (iii) improved
enforcement; (iii) enhanced monitoring of compliance with
the code of good governance, for example by introducing a
comply-or-explain requirement; and (iv) the creation of a
director training organization.
Citation
“World Bank. 2003. Corporate Governance Country Assessment : Colombia. Report on the Observance of Standards and
Codes (ROSC);. © Washington, DC. http://openknowledge.worldbank.org/handle/10986/20436 License: CC BY 3.0 IGO.”