Malawi: World Bank wants changes in laws

  1. Posted on Thursday 22 January 2009 - 10:18
    Harry
    Image of Harry
    Harry Mangulenje, AfricaNews reporter in Blantyre, Malawi Photo: Some foreign workers in Malawi. Amy Franken
    The World Bank has recommended that Malawi needs to improve its company laws to be in tandem with the fast flourishing corporate governance policies around Africa and the world in general. It said the nature of the company codes in Malawi poses a major challenge to effective Corporate Governance.
    Majete11
    World Bank Consultants - Alex Berg and Alison Kibirige - said they have advised the government on the need to review all the company codes and fasten them up to international standards. “We understand there is a country action plan to the same effect, where consultations are ongoing among members. In the action plan there is a list of activities to be done. After that we understand there will be a formalization process,” they said.

    The consultants made the observation at the unveiling of a lengthy research on the subject under the name ROSC report. Corporate Governance is a mode in which companies can be run to achieve viable and valuable goals, achieve effective and efficient use of resource as well as make decisions in the interest of their shareholders.

    “Our advice to government is that the company codes require a bit of fastening, so that corporate governance can effectively work,” said Berg after his own presentation on what World Bank is doing on helping countries improve environment for effective corporate governance.

    The east African country of Kenya is at the moment ranked the best in corporate governance inspite of its post-election crisis.

    Berg said partly the issue of corporate governance lies with private sector because such companies have their own independence which can lead them into making directions on corporate governance.

    “World Bank hopes that companies in Malawi should be able to comply with laid down laws and at the same time government should be able to review the codes to help the companies achieve good corporate governance. We are hopeful because this kind of thing is working in Kenya and many other African countries,” said Berg.

    He said the changes must include improvement in self evaluation, improving scope of benefits, protection from abuse of benefits, increased share holder value, lowering risks, harmonization of take over and mergers, inside trades, rights of shareholders, role of shareholders, disclosure and transparency, responsibility of the board among others.

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