The vision of the taskforce, comprising the British Foreign and Commonwealth Office and three private companies, is to support the development of Myanmar’s budding financial sector.
“We want to provide an overall vision of what a fully functioning financial sector could deliver for the economy and identify areas that should be prioritised to ensure faster adoption of financial services, including the necessary technology and infrastructure required,” said British ambassador Andrew Patrick.
“Also we want to assess opportunities and strategies to leverage new technologies in areas such as online channels and mobile banking,” said Mr Patrick.
The taskforce will also be involved in providing training for the private and public sectors as well as providing advice to the Minister of Finance, Attorney General and the governor of the Central Bank of Myanmar.
As part of its training role, the taskforce is organising a corporate governance workshop at the headquarters of the Union of Myanmar Federation of Chambers of Commerce and Industry from November 18 to 20. An outcome of the workshop will be an action plan.
The challenges to corporate governance in Myanmar include the way company meetings have been conducted, said Katryn Thornton, a senior associate with Allen & Overy, one of three companies on the taskforce.
“From a legal perspective I think that a major challenge is that for many years a lot of companies have not really followed the strict procedures in the law in relation to holding directors and shareholders meetings, or even maintaining a register of shareholders,” said Ms Thornton.
This had resulted in the distinction between management and shareholders being blurred, she said.
“Good corporate governance is about being more transparent and open; this definitely is an area to work on as the country opens up,” said Ms Thornton.
Prudential is another partner in the taskforce and its chief country representative, Allen Thai, said there were corporate governance issues in Myanmar arising from most big businesses being privately owned, with decision-making and strategy-setting often being top down.
“In general the concept of governance is little known by many companies,” said Mr Thai. “In the insurance sector all the companies, except for Myanma Insurance, are newly set up. It will take time for them to build a robust governance structure, including succession-planning, conflicting interests and risk management,” he said.
The third corporate partner in the taskforce is Standard Chartered Bank, whose chief country representative, Tina Singhasacha, said the government had introduced a roadmap to modernise the financial sector and expand access to finance, including a further opening of the banking sector.
Ms Singhasacha said there was also a move to develop the capital market, with the launch of a stock exchange expected in 2015.
“AS work continues reforms must also be complemented by efforts to establish sound corporate governance practices aligned with international standards,” said Ms Singhasacha.
“An effective corporate governance system is essential, both within individual companies and across the economy as a whole, as investors need the assurance that capital markets will function in a framework of transparency and accountability,” she said.
“As you know, this country is at a very early stage in its financial sector’s development and the taskforce looks forward to working with the local business community on this important issue.”
Asked if the taskforce process was intended to result in intensified activities in Myanmar of the three companies, Mr Patrick said they had each established a presence in the country at least two years ago and had been providing pro bono support to the government and the private sector.
“Of course, all three partners see commercial opportunities here but I think their work so far exemplifies a long-term commitment to ensure that the domestic sector prospers,” said Mr Patrick.
This Article first appeared in the November 13, 2014 edition of Mizzima Business Weekly.
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