Experts from the International Finance Corporation (IFC) and the Securities and Exchange Commission of Myanmar (SECM) held a business forum at the Stock Exchange in Yangon recently. Its aim was to discuss the best ways to attract investment and increase stakeholder confidence.
Listed firms were invited to hear key speakers discuss disclosure and transparency standards in reporting. The conference was called Enhancing corporate transparency trends and a business case on transparent reporting and ongoing disclosure and was held with input from the UK Department for International Development and the Australian Department of Foreign Affairs and Trade.
How to increase stakeholder trust
The main takeaway from the conference is the crucial nature of transparency and disclosure practices for businesses that want to increase trust from stakeholders, invite new investors and make sure any media reporting about their business is accurate.
Speakers from all of the bodies involved shared their expertise and knowledge to help companies in Myanmar benefit from their advice. Companies have been urged by stock exchanges, international investors and regulators to release information in a timely way so that potential investors can make informed decisions.
A spokesperson from the IFC said: “Studies on emerging markets found that better governance is associated with higher valuations of firms. Investors find companies with fuller disclosure more trustworthy and less risky for them to invest in, thus lowering the cost of capital that then translates into higher valuations.”
Disclosure good for economy
A representative from the UK government’s Department of International Development said that corporate governance is vital not only for individual companies, but also for Myanmar’s economy as a whole. He said: “A vibrant private sector is important for jobs and reducing poverty … It’s the businesses which create jobs.”
Businesses in Myanmar will benefit from a more complete and thorough understanding of business best practice to improve their management and grasp the need to disclose corporate information for the greater good.
Different kinds of disclosure
The disclosure of corporate information comes under two different categories:
- Statutory disclosure: this is the legally required disclosure of documents
- Timely disclosure: this is the disclosure of corporate information to investors by listed companies. It has to be made in a timely manner and accord with stock exchange regulations.
Disclosure of corporate information on an ongoing basis is also important to make sure any media reporting is accurate.
Tools of disclosure
It was highlighted by the director of MCRB, Vicky Bowman, that there are certain tools that are absolutely essential for companies to be successful. One of these is having an up-to-date company website. She said: “No company without a website would have the trust of investors. The internet is becoming a key tool of disclosure… Just having a Facebook page is not enough.”
She also reiterated the importance of having up-to-date, accurate project and company information displayed on the company website. To make sure any media coverage is fully accurate, and therefore helpful to existing and future investors, keeping on top of public relations and external communications are important.
Dealing with criticism
Experts also warned against relying only on annual reports as a form of communication with the media. A proactive approach to releasing information and responding to any potential criticisms is just as important.
Company and annual reports are rarely distributed in reader friendly formats, and won’t necessarily be picked up by the media. This builds a further case for having a well-designed, easily digestible website that is updated regularly.