Where does Uganda stand on corporate governance?

Nine chefs one dish, obviously that is a spoilt broth as the saying “too many cooks spoil the broth” goes.

But this is not an ordinary dish from ordinary chefs, some of the top legal, academic and governance experts that include a judge, capital markets regulators, academicians, lawyers, corporate governance and finance experts have put their heads together for the first book on corporate governance in Uganda.

This is a mouth-watering and finger licking broth, welcome to Corporate Governance in Uganda.
From concepts, theories, best practices, to legal frameworks of good governance, the book lays bare the standards of governance in various sectors such as banking, pensions, capital markets, private and public.
On the history of corporate governance Alison Dillon Kibirige, draws examples from various jurisdictions from Europe, Asia, North America and South Africa, home to the father of Africa’s corporate governance, Prof Mervyn King, who wrote the book’s foreword.

Being the first of its kind in the country, people such as Finance minister Maria Kiwanuka, Bank of Uganda Governor Emmanuel Mutebile and Mr Leo Kibirango, the former Bank of Uganda governor, have endorsed the book and recommend it to students and executives in the public and private sectors, directors and shareholders.

Corporate governance may sound a preserve for the private sector, but in corporate governance in Uganda, that belief is shredded to pieces, showing how its principles apply to non-governmental organisations, family-owned enterprises and public sector bodies among others.

The authors weave corporate social responsibility (CSR) as part and parcel of good governance. They, however, argue that CSR is not about corporate organisations giving back to the community in which they operate. It is more than that and starts from within the organisations or institutions through what they have called internal corporate responsibility.

Most of the contributors being lawyers, it’s no wonder that they have made a good case in support of good governance as a must do practice in the modern world and more so in the current Uganda that is yearning for all possible forms of better governance as one of the tools for development not only economically, but socially and politically. Deciding to ignore the best practice is at your peril and more to both shareholders and stakeholders.
According to Candy Wekesa Okoboi, one of the authors, the standards of best practice are not only Ugandan standards, but are “generally accepted corporate good governance standards that have been widely adopted by various jurisdictions”.

One of the acceptable standards is having both non-executive and independent directors who are independent of the management and external influence. Most of the best practice standards apply to companies listed on the stock exchange but also to other organisations including family-owned companies.

On the legal and regulatory frameworks front, corporate governance in Uganda is approached in two forms. The mandatory form, also called ‘comply or else’, and the voluntary one also known as ‘comply or explain’. “The former is where corporate governance standards are enshrined in legal enforceable instruments, with legal penalties for non-compliance, while the latter includes guidelines that contain best practices on particular governance issues such as treatment of shareholders, transparency and accountability among others.”

Explains role
Besides looking at the legal framework, the book in detail explains the role played by professionals and professional bodies in fostering good corporate governance. According to Jimmy Walabyeki, one of the authors, professional bodies such as those that regulate lawyers, accountants among others, are performance drivers as well as custodians of ethical standards.

The authors draw on internal best practice to explain corporate governance standards in various sectors of the economy. For example Japheth Katto’s chapter is on corporate governance in capital markets, Miriam Ekirapa Musaali explains governance standards in the retirement benefits sector and Justice Kiryabwire provides an interesting account of how corporate governance has evolved in Uganda’s banking sector. The book which was published by Fountain Publishers costs Shs40,000 at Aristoc bookshop.

The basic principles of good governance the authors are talking of in the book are universal practices as summarised in the words of Prof Marvyn King, “intellectual honesty as the foundation with the pillarsbeing fairness, accountability, responsibility and transparency.”

corporate governance in Uganda
Dr Winfred Tarinyeba Kiryabwire, another of the co-authors, explains that the legal and regulatory framework of corporate governance in Uganda is a hybrid framework that encompasses mandatory standards such as the banking standards and voluntary standards such as guidelines on corporate governance. According to Dr Kiryabwire, the 2012 Companies Act provides the primary framework for governance of companies and introduced a code of corporate governance that is voluntary for private companies and mandatory for new public companies.

lubegah@ug.nationmedia.com

SOURCE: Daily Monitor

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