Uruguay : Report on the Observance of Standards and Codes (ROSC), Corporate Governance Country Assessment

Abstract

This report provides an assessment of Uruguay's corporate governance policy framework, enforcement, and compliance practices. It highlights recent improvements in corporate governance regulation, makes policy recommendations, and provides investors with a benchmark against which to measure corporate governance in Uruguay. The paper discusses Uruguay's recent advances in financial and economic stability have given rise to an adequate basis for capital markets deepening and growth. However, these initial advances were jeopardized by a series of defaulting securities issuers and the 2002 financial instability episode which led to a perception of high risk and unpredictability of capital markets. The report then identifies several key steps to take in order to set strong corporate governance efficiency in the state owned financial sector. These steps include: improving corporate information, particularly ownership disclosure, related party transactions procedures, and financial reporting; promoting effective and active boards of directors; strengthening institutions, including the securities regulator, and the companies registry; and modernizing securities markets by strengthening intermediation and related regulations.