Bolivia: International Seminar on Corporate Governance

(La Paz, March 9, 2006).- The Andean Development Corporation (CAF), the Bolivian Stock Exchange (BBV), and the Santa Cruz Chamber of Industry, Commerce, Services and Tourism have organized the International Seminar on Corporate Governance, for business leaders and investors. The objective is to share international experiences on the area and explain the general lines of an Andean Code of Corporate Governance. The event will be held today in Santa Cruz in the CAINCO auditorium, and tomorrow Friday in La Paz in the Libertador Room, Hotel Radisson.

CAF representative in Bolivia José Carrera will open the two seminars and Andrés Langebaek Rueda, chief executive of the CAF Office of Public Policy and Competitiveness, will present the general concepts and guidelines of the Code. Guests from Peru, Argentina, Colombia and Bolivia will speak on their experiences and issues related to corporate governance in publicly-held, closed and family companies.

The capital markets of the Andean countries are characterized by a poor level of relative development as reflected in low financial depth and incipient stock exchange capitalization. Although various factors explain this trend, financial analysts emphasize lack of business transparency and weak practices of good corporate governance.

In this context - and in pursuit of its commitment to sustainable development and regional integration - CAF is promoting and developing the best practices of corporate governance in the Andean region by organizing activities such as the seminars in Santa Cruz and La Paz.

The seminars deal with issues such as value added in the implementation of the Code (Peru), corporate governance in publicly-held companies: transparency and enforcement (Argentina); corporate governance in closed and family enterprises (Colombia); and the Tahuamanu experience in implementing the Code.

The situation of business financing in the Andean countries shows that only a minority of companies finance their investment programs by share or bond issues. Most prefer bank loans or plowing back profits because of the bad practices of corporate governance, among other factors.

Good practices are related to the system that a company applies to manage and control the development of its business or economic activity, which is the sharing of rights and responsibilities, the ground rules for decision-making, and above all the practices that govern relations between managers and investors.