Best-managed LATAM companies 2008: High standards are the exception
Large Latin American companies with substantial exposure to foreign investment are adapting rapidly to the need for good corporate governance and receptive investor relations. But there is still a hard core of resistance to change from family-centred businesses. John Rumsey reports.
LATIN AMERICAN COMPANIES continue to trail the global pack in corporate governance. Of late, Brazilian companies, given incentives by a proliferation of market initiatives and support from vigorous associations, have progressed furthest and fastest. Chilean companies continue to have the strongest legislative framework. Mexico, Peru and Colombia are all moving forward but companies from Argentina are tending to tread water. Venezuela and its allies are moving full steam, only astern, not ahead.
The overall mixed pattern makes it all the more impressive that some companies are definitely raising the barrier in Latin America. What marks them out is a sophisticated approach that combines consistency and fair timing with an ability to tailor information to the needs of funds with different strategies; regular, open roadshows; constantly improving technology; professionalization of the investor relations function; and, crucially, the creation of a two-way street with the ability not just to inform but also to listen.
Cultural barriers for Latin companies in investor relations and corporate governance are daunting.