Abstract
The term 'corporate governance' has gradually broadened to encompass many different aspects, notably a redefining of a board's leadership and role within organisations, increased accountability for executive and non-executives vis-a -vis owners and debt-holders, greater transparency and disclosure enabling market participants to assess value and risk, increased use of ethical standards, and a formal engagement with the corporate social responsibility agenda. Overall, this can be seen as a significant change in attitudes and practices for organisational actors, particularly for the people situated at the apex of the hierarchy. However, the extent to which such attitudes and practices have really change worldwide and locally is put into question, as is highlighted by our literature review. Throughout the course of this study, this question has continually emerged as a central one and has informed its specific objectives, analysis, findings and recommendations. The World Bank Report on the Observance of Standards and Codes (ROSC, 2002) - relating to the assessment of corporate governance in Mauritius - made several policy recommendations aimed at unlocking shareholder value and increasing investor confidence via the strengthening of regulatory mechanisms, the professionalising of directors in Mauritius and greater disclosure/transparency to the market/public. One of the main planks underpinning these developments was the adoption of a Code of Corporate Governance. The latter was enacted since the financial year ending 2005 after nearly two years of government-sanctioned discussion, debate and consultation. Further to the publication of the corporate governance code, we sought to
1) investigate the progress and the state of corporate governance implementation in Mauritius, by focusing on listed, non-listed large companies and State Owned Entities (SOEs),
2) examine the impact of corporate governance on the immediate actors and 'wealth maximising' stakeholders of the company, and
3) assess the extent and progress of âintegrated sustainability reporting' performed by local organisations.
A scoring system based on a content analysis of annual reports has been devised to measure comparative positions and trends in reporting on a number of aspects disclosed in annual reports over a four year period (2004 to 2007). In addition a series of semi-structured interviews were also performed since one commonly reported weakness of corporate governance studies is that they solely depend on annual report disclosures. The use of interviews is believed to be more suitable in unearthing the different meanings and perceptions. We found that the level of implementation of the code amongst listed companies has shown a marked improvement which may due to the fact that adherence to the code is a listing requirement. However, this state of things needs to be contrasted to a picture of low implementation in Large Public and Private (LPP) companies and an even poorer adoption level among statutory bodies. Furthermore, an increasing number of listed (and a few LPP) companies appear to review their traditional attitude towards an ad hoc behaviour of charitable (and political) donations, and are moving towards sustainability reporting - with the aim of developing a structured approach to Corporate Social Reporting (commonly referred to as strategic CSR). However, directors' perceptions of these developments remain overwhelmingly focused on charitable endeavours (albeit in a better thought out way) and so far pay considerably less attention to integrating other key societal aspects of integrated sustainability reporting (such as environment, health and safety, promoting diversity/social harmony, human resource practices, ethics). Informed by the above findings, we formulate recommendations which would be of interest to relevant government agencies, professional associations and directors in ensuring that the positive aspects of a corporate governance code can be appropriately implemented and on a more comprehensive and targeted basis in Mauritius.
Keywords
Corporate Governance,Board,Companies,Organisations