Washington, D.C., February 11, 2008—According
to a new publication released today by the IFC Global Corporate Governance
Forum, private-public sector leadership has helped drive the success of
corporate governance reforms undertaken by BOVESPA, Brazil’s São Paulo
Stock Exchange, which is now the world’s largest among emerging market
countries. This past October, BOVESPA Holding SA successfully launched
its own initial public offering, which raised $3.7 billion and was the
world’s fifth-largest in 2007, according to Bloomberg.
In the new publication, Novo Mercado and its Followers: Case Studies
in Corporate Governance Reform, Maria Helena Santana, Chairperson of
the Brazilian Securities and Exchange Commission, writes that the viability
of BOVESPA’s Novo Mercado was in doubt when it was launched. “Since
adherence by companies to its rules is voluntary, Novo Mercado could only
become a reality if investors and other suppliers of capital demanded compliance
and if companies considered corporate governance obligations to be advantageous.”
To address investors’ needs, BOVESPA launched Novo Mercado, which requires
companies to voluntarily adopt high standards of corporate governance that
exceed those required by Brazilian law. These include an expansion
of shareholder rights and comprehensive disclosure obligations. While
at BOVESPA, Santana was in charge of creating and implementing the Novo
Mercado and the two levels of corporate governance. The initiative
received broad support from the Brazilian Institute of Corporate Governance,
Comissão de Valores Mobiliários, IFC, the Organisation for Economic Co-operation
and Development, and institutional investors and investment banks in Brazil.
With this support, Novo Mercado has become the “standard that investors
would require for new companies seeking to go public,” Santana writes.
The publication is available online in downloadable format on the IFC Global
Corporate Governance Forum’s Web site at www.gcgf.org.
IFC, a member of the World Bank Group, fosters sustainable economic growth
in developing countries by financing private sector investment, mobilizing
private capital in local and international financial markets, and providing
advisory and risk mitigation services to businesses and governments. IFC's
vision is that poor people have the opportunity to escape poverty and improve
their lives. In FY07, IFC committed $8.2 billion and mobilized an additional
$3.9 billion through syndications and structured finance for 299 investments
in 69 developing countries. IFC also provided advisory services in 97 countries.
For more information, visit www.ifc.org.
IFC Global Corporate Governance Forum
The Global Corporate Governance Forum is an IFC multidonor trust fund facility.
It was cofounded by the World Bank and the OECD in 1999. Through
its activities, the forum aims to promote the private sector as an engine
of growth, reduce the vulnerability of developing and transition economies
to financial crisis, and provide incentives for corporations to invest
and perform efficiently in a socially responsible manner. It sponsors
regional and local initiatives that address the corporate governance weaknesses
of middle- and low-income countries in the context of broader national
or regional economic reform programs. Its donors include IFC and
the governments of Canada, France, Luxembourg, the Netherlands, Norway,
Sweden, and Switzerland. For more information, visit www.gcgf.org.