…as an international Financial Hub bridging East and West

In order to determine how Mauritius can position itself as a beacon of corporate governance and thus a financial bridge between east and west, we must first establish the yardstick used, and assess the country by it accordingly. The OECD says the following indicators are the four pillars for good corporate governance : Accountability ; Fairness ; Transparency and Independence. Does Mauritius have all these factors working in its favour ?
Accountability. In its report on Mauritius, Worldwide Governance Indicators, Mauritius averaged in the 72nd percentile from 1996 -2009 for accountability in business. Business is called to order through legislative means to ensure that enterprises are not only accountable to its shareowners but to all of its stakeholders who may not only include its staff but also the communities that surround it. The governance of accountability is driven through reporting mechanisms in terms of the three main drivers of sustainability : people – how companies invest and protect its human assets ; profit – how companies perform in an ethical manner and lastly planet- how companies use natural resources wisely. This will undoubtedly attract and comfort both institutional investors and foreign share capital lenders who are looking for structure to the way business is done in a global arena where the absence of such accountability has had disastrous consequences.
Fairness. It is the duty of the boards that drive our business enterprises to ensure that the rights of all stakeholders are protected. This means not only the investors but the shareowners, staff, public and the environment. If Mauritius wishes to be the bridge for business between east and west, it will have to show serious intent to protect these rights. This will only happen if government and business strive to work together to ensure that businesses who manage to succeed in being fair are supported through favourable tax incentive schemes as they do in Singapore and Sweden. Shareowners and investors will need to become far more active in ensuring that their money is being put to good use and business will need to regularly assess how fairly it is conducting its affairs. Bad business practices such as bribery and related party transactions cannot be tolerated and must be prosecuted by competent authorities who are seen to hold office with integrity.
Transparency. This involves the private and public sectors providing timely and accurate disclosures on all material matters relating to its enterprise and related activities. If Mauritius is going to be seen as the financial hub in the region, good governance dictates that transparency on all transactions must be demanded. In the 2010 Transparency Perceptions Index by Transparency International, Mauritius was ranked 39th out of 178 countries scoring a 5.4 out of 10, the second highest in Africa behind Botswana. Whilst this bodes well for the country to attract foreign interest, it is still far behind Singapore, ranked first in the world with a 9.3 score where transparency is the norm rather than the exception.
Independence. Is the private sector free from interference from government ? In order to become the bridge from east to west, Mauritius will need to show the world that it has processes and policies in place that supports businesses that are free from undue interference and where conflicts of interest are avoided or mitigated. Good governance dictates that boards keep a register of conflicts of interest and that where possible these be avoided. Compliance to Bodies such as the Financial Reporting Council should be seen as a positive initiative to keep business moving towards the highest standard of corporate governance. It also encourages balanced boards that are composed of members who display independence of thinking and ensure the prosperity of the enterprise which it serves.
It has been proved that countries which endorse good corporate governance attract foreign share capital much easier ; they enjoy the benefit of a good reputation that encourages global concerns to invest and set up base in their country and their business environment is favourably seen as low risk. Although Mauritius is clearly making positive strides in the right direction more attention is needed to ensure that businesses understand the value of corporate governance towards not only enhancing its bottom line but also to ensure that Mauritius as a country becomes the financial hub in the region.
The value of corporate governance to individual organisations is clear. The results are seen in robust financial results and in substantial performance against strategy. For a nation such as Mauritius the value of good corporate governance is creating a sound economy and enhanced reputation that will be enjoyed for generations to come. Corporate governance is the key to financial leadership in the region that will ensure that Mauritius becomes the bridge between east and west not only geographically but in terms of business leadership also.

Reverend Kim Andersen has a degree in Theology and is an ordained minister and is presently busy with her Masters in Executive Coaching. Kim has retrained as an organisational development expert specialising in three main areas: leadership training and coaching.  She specialises in cultural transformation within organisations and the creation of developmental forums. Kim is an accredited trainer with the Global Corporate Governance Forum and is a regular contributor to its training and development blog.  She is a fellow of the Mauritius Institute of Directors and also a  member of the South African Institute for Directors and the Coaching and Mentoring Association of Southern Africa.   Her practice currently spans South Africa, Madagascar, Mozambique, Zambia, The United States and Mauritius where she currently spends five