2009年-世界发展银行全球_Corporate_Governance_Country_Assessment___Togo_58页_1mb

Corporate Governance Country Assessment: Togo (March 2009)

Core Content Overview

This report evaluates Togo's corporate governance framework, focusing on public limited companies, including state-owned enterprises (SOEs), state-owned banks (SOBs), and private companies. It aims to support the country in improving corporate governance by assessing legal and regulatory structures, corporate governance practices, and providing policy recommendations.

Corporate governance is defined as the structures and processes for the direction and control of companies, involving relationships among management, the board of directors, controlling and minority shareholders, and other stakeholders. It is crucial for sustainable economic development, enhancing company performance, and increasing access to outside capital. The OECD Principles of Corporate Governance provide the basis for the assessment, covering shareholder rights, stakeholder roles, disclosure, and board responsibilities.

Main Findings

Legal and Regulatory Framework

• Basic legal framework exists, but has not kept pace with recent developments in corporate governance.
• Togo's legal system is based on the French civil law tradition.
• Company and securities laws are set at the community level (OHADA) rather than the national level.
• The Uniform OHADA Act on Company Law (AUSCGIE) governs public limited companies, but specific provisions from national law also apply to SOEs.
• Ownership disclosure is inconsistent, only required for listed companies.
• Accounting standards (SYSCOA) are not appropriate for large SOEs and banks, which should follow IFRS.
• Auditor independence is a concern, with some mandates being renewable perpetually, except in SOEs.
• Whistleblower protections are lacking, and companies are not required or encouraged to implement them.

Investor Protection

• Basic shareholder rights are respected, such as the right to amend articles of association and issue new shares.
• However, shareholders may not receive adequate notice about meetings, and the information provided is limited.
• Equitable treatment of shareholders is not necessarily respected, with some companies granting more voting rights to long-term shareholders.
• Shareholder powers can be delegated to the board, but there are limitations, especially regarding large transactions.
• Takeover rules are weak, allowing acquiring shareholders to bypass tender offers or mandatory bids upon reaching ownership thresholds.

Corporate Governance Practice

• Boards are dominated by government representatives, especially in SOEs and SOBs.
• Independent directors are not common, with only 60% of companies claiming to have at least one.
• Board members often lack understanding of their roles, and many have limited business experience.
• Board functions are limited, with a focus on budget approval rather than strategic planning.
• Board meetings are infrequent, with 50% of companies meeting three or four times a year.
• Board accountability is lacking, with no legal mechanism to hold directors or management accountable for their actions.
• Conflicts of interest and related party transactions are not well managed, and there is no formal requirement for ethics codes.

Key Challenges

• Weak corporate governance frameworks in SOEs and SOBs.
• Lack of independent directors and board oversight.
• Low transparency and limited shareholder engagement.
• Poor governance culture in state-owned enterprises.
• Institutional and legal shortcomings that hinder effective governance.
• Limited investor participation and absence of a strong equity culture.

Recommendations

• The government should replace directors and officers associated with past financial failures.
• Workshops and seminars should be organized by both public and private sectors to raise awareness of good governance practices.
• An overall strategy for SOE and financial institution governance reform should be developed.
• Corporate governance improvement programs should be introduced for key SOEs that remain in state control.
• Legal and regulatory reforms should be supported at the UEMOA level.
• Institutional reform in the private sector should be encouraged to align with international standards.

Next Steps

• The report emphasizes the need to build a corporate governance culture in SOEs and SOBs.
• Governance reform should be cost-effective and complementary to financial and operational restructuring.
• The reform should be driven by the government's role as an effective owner of key institutions, with a focus on performance improvement and accountability.

Summary of Observance of OECD Principles

• Shareholder rights are generally respected, but equitable treatment and transparency are lacking.
• Disclosure and transparency are insufficient, especially in non-listed companies.
• Board responsibilities are partially defined, but lack accountability and independent oversight.
• Stakeholder roles are not clearly integrated into the governance structure.

Conclusion

Togo has a basic legal framework for corporate governance, but it lacks the depth and adaptability required to support sustainable economic development. The governance practices in SOEs and SOBs are particularly weak, and the overall corporate governance culture is in its early stages. The report recommends a comprehensive reform strategy, including legal updates, institutional support, and awareness-building initiatives, to improve governance in the country.