Azerbaijan, Baku, Feb.4 / Trend I.Khalilova/
The Azerbaijani Ministry of Economic Development together with the International Finance Corporation (IFC) presented corporate governance standards for the Azerbaijani companies.
"The introduction of these standards will allow the companies to improve their activity and risk management, reduce the financial risks and the capital costs, to provide access to investments, as well as to enhance the companies and shares value in the listing," ACGP head Caroline Bright said.
"The Azerbaijani banks and companies attracted $100 million investment as pilot organizations under the project since 2005," Bright said.
The working group prepared corporate governance standards intended for all sectors of the Azerbaijani economy, so they should pass the discussion with interested sides before the adoption. This process will be held in February and the group prepared final document until the first half of 2010. The working group will approve the standards in late 2010 - early 2011
The Azerbaijani companies can adopt standards on a voluntary basis.
Introducing these standards is very important to neutralize and reduce influence of the crisis, so there is no need to establish a control over this process. Each company is interested in increasing its incomes," Economic Development Ministry corporate governance sector and working group head Anar Hadjizadeh said.
"The Working Group has studied the experience of 10-15 countries in developing corporate governance standards. For example, Russia and Germany approved the standards by the federal commission, but we do not consider it necessary," Hadjizadeh said
"Azerbaijan created a favorable situation, held agrarian reform, whilst the privatization of state property is underway, contributing the development of the private sector. This is well seen while viewing the share of private sector in GDP which comprises 85 percent, agriculture 99 percent, industry 91 percent, transport 78 percent and 70 percent of able people is also engaged in the private sector," he added
At present, we are cooperating with the State Securities Committee to design amendments to the Civil Code and have prepared listing rules with the Baku Stock Exchange (BSE), which already provides for introducing corporate governance standards in the legislative order
According to Bright, banking sector shows the most activity in implementing the standards of corporate governance in connection with the CBA requirements on introducing standards. Furthermore, the banks attract deposits and they need properly conduct the work, to improve management and to enhance the quality of services to boost clients' trust
"Another factor of great interest is more diversified approach in the bank management, so it is important to apply the corporate governance standards," Bright said
The IFC provided consultations to four banks and five non-banking sectors however, corporate governance standards were presented to roughly 430 companies.
"The real sector will show more interest in implementing corporate governance standards, after the adoption of Azerbaijani standards," Bright said
The Swiss Economic Relations Secretariat (Seco) will fund the second phase of the project and allotted $2.9 million for its realizing
Azerbaijan is a member of the IFC since 1995.The IFC has invested 40 projects worth $300 million and provide syndicated loan worth $104 million in Azerbaijan