The Organization for Economic Cooperation and Development (OECD) published the report: “Corporate Governance in Costa Rica”. In this context, a virtual public event was held with the participation of the OECD Secretariat and senior public officials related to the process of accession of Costa Rica to the OECD on this matter.
The report portrays the evolution of Costa Rica in the implementation of the OECD recommendations to approach the organization’s standards in this matter: the “OECD Guidelines on Corporate Governance of State Companies”, the “Guidelines on the Fight Against Corruption and Integrity in Public Companies” and the “Corporate Governance Principles of the OECD and the G20”. The document also details which are the pending tasks that the country must continue working.
The event was attended by Pilar Garrido and Elian Villegas, heads of the Ministry of National Planning and Economic Policy (MIDEPLAN) and the Ministry of Finance, respectively. Both are members of the Monitoring Committee of State-Owned Companies, of which the Minister of the Presidency is also a member.
Minister Garrido referred to the actions related to State-Owned Enterprises (SOEs) implemented to meet the recommendations of the OECD. She highlighted the creation of the State Stock Ownership Advisory Unit, the issuance of the “Protocol of Understanding of the Relations between the State and the SOEs and the first”, “Aggregate Report on the Set of State-Owned Companies“, as well as the establishment of a public mechanism for the selection of members of the boards of directors of the SOEs, based on suitability and experience.
“The actions developed focus on improving the coordination between the State and its companies; promote transparency and accountability of SOEs; and professionalize their boards of directors, with the ultimate goal of improving the management of these companies and guaranteeing that they are sustainable over time,” said Garrido.
For his part, the head of the Treasury pointed out that “what has been achieved in this process is in line with the efforts to strengthen management, improve efficiency and transparency in the execution of spending by these institutions, in order to improve management of the finances of public institutions and collection.
Challenges still ahead
Yet there are important challenges for SOEs, which is why we must continue working to improve the management of these companies, a process that will positively impact public finances”.
Compliance with the recommendations relating to the “Principles of Corporate Governance of the OECD and the G20″ was in charge of the superintendencies of supervision of the financial system, mainly the General Superintendency of Securities (SUGEVAL), under the leadership of the National Council Supervision of the Financial System (CONASSIF).
During the event, María Lucía Fernández, SUGEVAL Superintendent, referred to the different actions taken during the process. She highlighted the reform of the Securities Market Regulatory Law, which, among other aspects, will allow SUGEVAL to be a signatory to the Multilateral Memorandum of Understanding of the International Organization of Securities Commissions (IOSCO for its acronym in English). “Increased cooperation and assistance with regulators from other countries, which enables being signatories to the MMoU, will improve credibility and confidence of the local and international investor in the Costa Rican securities market”, indicated Fernández. She also referred to the implementation of the Regulations on Corporate Governance and the issuance of the Financial Information Regulations.
Alberto Dent, President of CONASSIF, highlighted in the closing remarks of the event that “The OECD report contains a series of recommendations whose implementation will ensure continuous improvement of the country in terms of corporate governance. Additionally, as members of the OECD, we will have the great opportunity to benefit from the experiences and knowledge of peer countries, which will contribute to bring us even closer to international standards in governance, for the benefit of our financial system and Costa Rican society”.
For his part, Duayner Salas, acting Minister of the Ministry of Foreign Trade, the institution in charge of coordinating the process of joining the OECD, indicated that “we will continue working on the implementation of the mechanisms already established and on the pending recommendations, to maximize the benefits of better management of SOEs”.
Corporate governance refers to the way in which authority is assigned and corporate decisions are made, in both public and private sector companies. Costa Rica’s evaluation of corporate governance began in 2016 as part of the country’s accession process to that organization, and culminated in October 2019, when the OECD’s Corporate Governance Committee approved the country in this regard.