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Topic :   Economic, Business and Development  
CORPORATE GOVERNANCE Assessment of State-Owned and Partially State-Owned Mining Companies PDF Print E-mail

To strengthen corporate governance in the mining sector Open Society Forum in cooperation with the
Ministry of Mining of Mongolia assessed the governance performance of nine state-owned and partially
state-owned mining companies.

A research team led by D. Bailikhuu used the International Finance Corporation (IFC) methodology
for assessing corporate governance performance. Although the regulatory framework of corporate
governance has been improving in Mongolia, the research data shows each company’s governance
performance did not meet the expected level. In the assessment most of the companies got rating of
one-out-of-three in the required scale, only Oyu Tolgoi LLC attained nearly half of the required score
(48%). Compared to the ratings of other Asian countries as such as Vietnam, Philippines, Thailand and
Hong Kong, the governance of Mongolian state owned companies were rated 1.5 to 2.5 times lower.
In the sections of transparency and disclosure, extraordinary transactions, protection of shareholders’
rights, and board activities were showed to be the most deficient.

Adequate performance of corporate governance is an important factor for successful business, especially
for state-owned enterprises of which business is based on public property; there is a direct correlation
in increasing company’s profitability, avoidance of public resource embezzlement and increasing
probability of foreign investment, which ensures operational sustainability and longevity of the company.
In conducting this survey, the Open Society Forum and the Ministry of Mining of Mongolia aimed to
determine the quality of corporate governance of mining companies in which the government holds a
stake, as this plays an important role for the economic development of the country and to identify areas
for improvement. Based on the assessment result, we submit recommendations on specific elements of
corporate governance including the relationship between the government and state-owned enterprises,
state representation and its performance, etc. to each of the companies involved in the survey.

Lastly, we would like to extend our deepest gratitude to the research team that successfully implementing
and consolidating each company’s assessment report.

P. Erdenejargal
Executive Director of Open Society Forum

View PDF :  
Author : Open Society Forum
Source : Open Society Forum
Topic :   Economic, Business and Development  
File type : PDF
Year : 2014
Keyword :

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