Title: Corporate governance in developing economies – the case of Egypt

Authors: Jennifer Bremer, Nabil Elias

Addresses: Management Department, American University in Cairo, 113 Kasr el-Aini Street, Cairo, Egypt. ' Belk College of Business, University of North Carolina Charlotte, 8901 University City Boulevard, Charlotte, NC 28223, USA

Abstract: Recent scandals such as those involving Enron and WorldCom (USA), Nortel and Crocus (Canada), and Parmalat and Royal Ahold (EU) exposed failures in corporate governance that shook the capital markets in developed countries and put the spotlight on weak corporate governance in developing, emerging and transitional economies. Companies from developing economies with weak financial transparency and governance will find it difficult to raise capital and attract foreign investors. We investigate the challenges and evaluate the progress of corporate governance in Egypt. Using historical, empirical and interview data, we review the development of stock markets and accounting and financial reporting standards. We analyse the structure of capital markets, major players in the economy, the privatisation policy, board structure and the cultural and legal environment of corporate governance. We review initiatives and impediments for improving corporate governance, including the establishment of the Egyptian Institute of Directors. The implications of this study are important for Egypt, developing countries and global investors seeking international diversification.

Keywords: corporate governance; developing economies; business governance; Egypt; stock markets; accounting reporting; financial reporting; reporting standards; capital markets; privatisation policy; board structure; cultural environment; legal environment; developing countries; international diversification.

DOI: 10.1504/IJBGE.2007.015210

International Journal of Business Governance and Ethics, 2007 Vol.3 No.4, pp.430 - 445

Published online: 26 Sep 2007 *

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