Over the years, the link between corporate governance and stock market performance has become more evident, with investors paying closer attention to a company's governance practices before investing. Private equity investors also show a greater preference for companies that embrace good corporate governance standards.
Today, the principles of corporate governance have become essential to gain shareholder confidence and maximize shareholder value. Companies with good governance practices are better equipped to navigate economic downturns with agility.
In this context, the Capital Market Authority (CMA), in collaboration with the International Finance Corporation (IFC), has developed the Capital Market Corporate Governance Code.
This code has been benchmarked against leading global frameworks and initiatives, including those from the OECD, IFRS, EU, the Task Force for Climate-related Disclosures (TCFD), and the Sustainable Development Goals (SDGs).
Speaking at the virtual launch of the governance code, CMA CEO, Mr. Thapelo Tsheole said that the corporate governance code will foster investor confidence. 'Confidence and integrity are crucial for the development of any capital market. Investors invest with the understanding that their money is in good hands and will remain in good hands. Good corporate governance structures inspire this confidence,' he said.
Tsheole added that Rwanda's capital market is in competition for capital, with investors spoilt for choice, hence the need for a competitive strategy.
Investors today have expanded their focus beyond a company's financial performance to include the financial risks and opportunities arising from broader economic, environmental, and societal challenges, as well as a company's ability to manage and adapt to those risks.
Click here to watch the virtual launch
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