It shouldn’t surprise anyone that a company interested in attracting investment might want to improve its corporate governance. The link between good governance and investor comfort is well-established, and IFC has seen growing demand for better corporate governance in many countries where there is serious interest in foreign investment.
Mongolia is no exception. Interest in corporate governance has grown quickly in the last few years, along with the hopes of a new, vibrant economy based on mining. Most of Mongolia’s top corporations have become active members of the Mongolian Corporate Governance Center and regularly participate in its training programs. One of them, Mongolian Mining Corporation (formerly Energy Resources) recently obtained approval from the Hong Kong Stock Exchange for a $1 billion initial public offering. If successful, it will be the first Mongolian corporation to be listed there.
Well done. It’s great that companies see corporate governance as a tool for attracting investments. But wouldn’t it be even better if companies wanted good corporate governance for its own sake? Just to be better? And if employees, customers, and the general public simply expected it?
One sign of a shift in this direction is a growing interest by academia. And in Mongolia, this is exactly what is happening. Professors from leading institutions, including the National University Law School, the Mongolia School of Industry and Commerce, the Academy of Management, and the Institute of Commerce and Economy, are making plans to introduce corporate governance in their business programs.
What does this mean for the next generation of business leaders? First, they’ll know what corporate governance is from the beginning of their careers. In 2008, few businesspeople I spoke to understood what corporate governance is, or what impact it could have on a firm or the private sector. But soon, every business student in the country will understand these concepts, and will be better positioned to apply them during their careers.
This is something that IFC has done before in Ukraine and Central Asia. Now, we’re working with the Corporate Governance Development Center to help professors design corporate governance teaching modules and prepare quality teaching materials in Mongolian.
I’m happy to see this progress. But I won’t be fully satisfied until I spot Mongolian students reading well-worn corporate governance textbooks in coffee shops. If the momentum keeps up, that day may not be very far off.