With the country’s economy expanding at break-neck velocity, the time has come for Cambodia’s private sectors and regulators to get serious about corporate governance to help sustain that impressive economic growth, government officials and economic experts agreed yesterday.
Speaking at a seminar hosted in NagaWorld Hotel dubbed “Driving Corporate Governance Practices in Cambodia”, Sou Socheat, director general of the Securities and Exchange Commission of Cambodia (SECC) said good corporate governance is now key to build up a company’s reputation and increase trust with partners and clients, helping improve the firm’s bottom line.
“With the backdrop of globalisation, it is essential that Cambodian authorities prioritise the implementation of good corporate governance practices, both for SMEs and big corporations, in order to improve our reputation as a place for business,” he said.
The forum was organised by SECC and Naga Academy, part of NagaWorld.
Chea Ya Eem, SECC’s head of corporate governance division, told Khmer Times that having a culture of strong corporate governance contributes to each employee having a more clear understanding of its role and function within their corporation, and helps the company utilise resources more efficiently, making it easier to avert a crisis.
“Of course, sometimes executives are very concerned. They want to build up good corporate governance, but they are afraid their employees will use the company’s resources or time to do things that are not productive. However, I believe these fears are unfounded,” Ms Ya Eem said.
“On the contrary, corporate governance helps build a code of ethics that helps the company achieve strong economic performance in the long run.”
Paul Olivera, Morgan Stanley’ executive director for Asia Pacific, said that catching up to more developed economies when it comes to corporate governance will take time, but it’s an investment that Cambodia needs to make to become a competitive player in the international scene.
“I am standing here, in NagaWorld, which itself is an excellent example of good corporate governance and bringing value for stakeholders. Naga made the right move towards not only ensuring but also embracing good corporate governance wholeheartedly.
“It is thus imperative that other corporate entities do the same as nothing beats good corporate governance in bringing value to the nation and to investors at large,” Mr Olivera said, adding that it will take at least 10 years to establish a solid foundation of “regulation, trust and integrity to create a level playing field” for all companies.
“If market participants believe the market is fair, they will dare to take risks, making for a more active and vibrant market. “It is an organic process. As long as collectively the country is taking the right step, I would not worry too much about how long it takes,” he added.
Mr Socheat said authorities and companies have to work together to build an ethical and effective system that allows the national economy to grow sustainably.
“The implementation of corporate governance also requires the support from stakeholders, especially from the regulators of each sector,” he said.
“For SECC, we have issued a lot of regulation for listed and non-listed companies to encourage them to abide by good corporate principles.”
A senior executive from Naga Academy said: “We strongly believe that good corporate governance brings benefits to all parties, which means it is a responsibility that must be shared by all. It is also about enhancing the competitive edge not just of individual companies but also of Cambodia as a whole, as globalization continues to bring the world closer together.”