World Bank2014-10-162014-10-162012-06https://hdl.handle.net/10986/20447This report assesses El Salvador s corporate governance policy framework. It highlights recent improvements in corporate governance regulation, makes policy recommendations, and provides investors with a benchmark against which to measure corporate governance in El Salvador. The OECD Principles focus on private-sector publicly traded companies, both financial and nonfinancial, but are also applicable to other public interest entities, including banks, insurance companies, and state-owned enterprises The equity market in El Salvador is small and has not showed much growth in the past five years. Most observers blame unwieldy approval processes for new share offerings, and the predominance in the economy of small- and medium-sized family-owned companies which do not have an interest in becoming public. Given the limited depth of the market, both regulator (SSF) and stock exchange (BVES) have taken measures towards regional integration. El Salvador today is participating in a regional initiative to develop an integrated Central American capital market with Panama and Costa Rica. Good corporate governance enhances investor trust, helps to protect minority shareholders, and can encourage better decision making and improved relations with employees, creditors, and other stakeholders. It is an important prerequisite for attracting the patient capital needed for sustained long-term economic growth.en-USCC BY 3.0 IGOACCOUNTANTACCOUNTINGACCOUNTING STANDARDSAUDIT COMMITTEESAUDITSBALANCE SHEETBANKING LAWBANKING SECTORBANKSBOARD MEMBERBOARD MEMBERSBOARD MEMBERSHIPBOARDS OF DIRECTORSBROKERSCAPACITY CONSTRAINTSCAPITAL MARKETCAPITAL MARKET DEVELOPMENTCAPITAL MARKETSCAPITAL STOCKCENTRAL BANKCENTRAL DEPOSITORYCEOCEOSCHIEF EXECUTIVECHIEF FINANCIAL OFFICERCIVIL LAWCOMMERCIAL CODECONFLICTS OF INTERESTCONSTITUTIONCONTROLLING SHAREHOLDERSCOOPERATION AGREEMENTCORPORATE BONDCORPORATE BOND ISSUESCORPORATE ENTITIESCORPORATE GOVERNANCECORPORATE GOVERNANCE CODECORPORATE GOVERNANCE CODESCORPORATE GOVERNANCE FRAMEWORKSCORPORATE GOVERNANCE REFORMSCORPORATE INFORMATIONCORPORATE PRACTICESCORPORATIONSCOST OF CAPITALCREDIBILITYCREDITORSCRITICAL MASSDEBT SECURITIESDECISION MAKINGDECISION MAKING PROCESSESDECREEDEPOSITSDISCLOSUREDIVIDENDDIVIDEND POLICYDIVIDENDSDOMESTIC COMPANIESDOMESTIC EXCHANGEDOMESTIC INSTITUTIONAL INVESTORSECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC INTEGRATIONEMERGING MARKETEMERGING MARKET COUNTRIESEMERGING MARKETSEQUAL TREATMENTEQUITY ISSUANCEEQUITY MARKETEQUITY MARKETSFIDUCIARY DUTIESFIDUCIARY RESPONSIBILITIESFINANCIAL CRISESFINANCIAL CRISISFINANCIAL DISCLOSURESFINANCIAL INSTITUTIONSFINANCIAL REQUIREMENTSFINANCIAL RESOURCESFINANCIAL SECTORFINANCIAL SITUATIONFINANCIAL STATEMENTSFINANCIAL SYSTEMFIXED CAPITALFOOD PRICESFUND ASSETSFUND MANAGERSGOOD CORPORATE GOVERNANCEGOVERNANCE ISSUESGOVERNANCE PRACTICESGOVERNANCE REGULATIONGOVERNANCE STANDARDSGOVERNMENT AUTHORITIESGROSS DOMESTIC PRODUCTHOLDINGHOLDINGSHUMAN RESOURCESIMPROVING GOVERNANCEINCOMEINCORPORATIONINFORMATION TECHNOLOGYINSIDER TRADINGINSTITUTIONAL CAPACITYINSTITUTIONAL FRAMEWORKINSTITUTIONAL INVESTORSINSURANCEINSURANCE COMPANIESINTERNAL AUDITINTERNAL CONTROLINTERNAL CONTROLSINTERNATIONAL GOVERNANCE STANDARDSINTERNATIONAL STANDARDSINVESTMENT CLIMATEINVESTMENT POLICIESINVESTOR CONFIDENCEINVESTOR PROTECTIONISSUANCESJOINT STOCK COMPANIESJOINT STOCK COMPANYJURISDICTIONJURISDICTIONSLEGAL ENVIRONMENTLEGAL FRAMEWORKLEGAL REFORMSLIABILITYLIMITEDMAJORITY SHAREHOLDERMANAGEMENT OVERSIGHTMARKET CAPMARKET CAPITALIZATIONMARKET PARTICIPANTSMINORITY INVESTORSMINORITY SHAREHOLDERMINORITY SHAREHOLDER PROTECTIONMINORITY SHAREHOLDERSMONETARY FUNDNATIONAL ECONOMYOWNERSHIP STRUCTUREPENSIONPENSION FUNDPENSION FUND ASSETSPENSION FUNDSPORTFOLIOPREEMPTIVE RIGHTSPRIVATE PENSIONPRIVATE SECTOR GROWTHPRIVATIZATIONPROPERTY RIGHTSPROPORTIONAL REPRESENTATIONPRUDENTIAL REGULATIONSPUBLIC DEBTPUBLIC DEBT SECURITIESPUBLIC INFORMATIONPUBLIC POLICYREGIONAL INTEGRATIONREGULATORSREGULATORY AUTHORITIESREGULATORY FRAMEWORKREMITTANCESREPRESENTATIVESREPUTATIONRETIREMENT SAVINGSRISK MANAGEMENTSECURITIESSECURITIES LAWSHAREHOLDERSHAREHOLDER AGREEMENTSHAREHOLDER AGREEMENTSSHAREHOLDER APPROVALSHAREHOLDER MEETINGSSHAREHOLDER PROTECTIONSHAREHOLDER PROTECTIONSSHAREHOLDER RIGHTSHAREHOLDER RIGHTSSHAREHOLDERSSMALL BUSINESSESSOCIAL SECURITYSTAKEHOLDERSSTATE-OWNED ENTERPRISESSTOCK EXCHANGESTOCK EXCHANGESSTOCK MARKETSUPERVISORY AGENCYTRACK RECORDTRANSACTIONTRANSACTION COSTSTRANSPARENCYTRUSTEETURNOVERTURNOVER RATIOUNIVERSITIESVOTINGWEAK CORPORATE GOVERNANCEWITHDRAWALWORLD DEVELOPMENT INDICATORSWORLD MARKETS10.1596/20447