LAHORE: In the United States and European Union, over 85% of businesses are family-run and are quite successful only because of applying true corporate governance rules that are a key to growth, help minimise wastages, lead to a good flow of capital, minimise corruption, risks and mismanagement besides lowering capital costs.
It is imperative in a growing economy like Pakistan’s to boost investor confidence and good corporate governance leads to greater confidence.
This was the crux of speeches and presentations made at a training workshop on corporate governance, jointly organised by the Lahore Chamber of Commerce and Industry (LCCI) and the International Finance Corporation (IFC) at the LCCI on Thursday.
LCCI President Farooq Iftikhar stressed that corporate governance is an increasingly important area of focus for the stakeholders in all organisations, particularly those listed on publicly-traded exchanges. “Today, all the organisations operating either at large or medium scales are facing ever greater challenges in addressing risk management, business ethics, strategic plans and internal controls,” he said.
Owing to changing societal norms, increasingly complex business environment and recent collapse of companies around the globe, he said, corporate governance has emerged as an imperative at the forefront of organisational concerns.
There was a consensus among the speakers that businesses need to strive for implementation of sound corporate governance practices to improve performance individually and boost investor confidence in a bid to improve the economy that has been facing multiple internal and external challenges.
Pakistan has its own culture and traditions, therefore, family influence over business matters more than any country of the world. IFC should prepare case studies for proper implementation of corporate governance in Pakistan, they suggested.
Like any developing economy, Pakistan also houses a large number of SMEs which not only employ a major segment of workforce, but also contribute to a great deal to the gross domestic product (GDP). Most of these SMEs are family-owned enterprises and for that matter keeping in view the typical style of management adopted by businessmen, the importance of learning about new concepts increases.
Published in The Express Tribune, March 23rd, 2013.
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