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Lebanon's Bipolar Behavior - Beirut Stock Exchange

BDL’s BLOM Bank and Bank Audi score a B+ and B- respectively, while other industries drag the GIR average down.

 

January 12, 2016 (Beirut) – Shareholder-Rights© by Capital Concept sal has released its 2015 Governance and Integrity Rating (GIR) on Online Transparency and Disclosure Report of Listed Companies on the Beirut Stock Exchange.

 

According to the GIR scores, only two companies received a B grade showing the performance approach to corporate governance, ethics and shareholder protection, which also demonstrate the companies’ implementation of progressive corporate governance programs and commitment to best in class practices beyond the law. These companies’ disclosure practices are a definite comparative advantage making them more attractive for local and international as well as individual and institutional investors.

 

Only one company received a C grade demonstrating it is implementing compliance based corporate governance within acceptable international standards raising the suspicion that it is using a utilitarian approach. This company still needs to disclose to an extent that gives the right signals to all stakeholders and not only existing shareholders.

 

Following behind are two companies that received a D grade, which reflects the state of corporate governance disclosure in the MENA region in a regulatory environment that does not reinforce or promote best in class practices.

 

The remaining half of the listed companies scored an F, thus, depriving shareholders from their right to access detailed information about their investment. This violation not only puts these companies at risk, but also gives wrong signals about Lebanon’s financial market and economy as a whole.

 

These findings decreased the average corporate governance rating for all BSE-listed companies. “The overall level of governance practices in Lebanese listed companies is inadequate, expressed in an average rating score of 27 percent or a flat D,” says Mr. Yasser Akkaoui, chairman of Shareholder-Rights©. “The average governance score improves to 39 percent when the view is narrowed to the banking sector, which represents the largest number of listed companies on the BSE. Three of the six listed banks earned ratings of C and above; however, two listed banks had to be rated with F and the overall average score for banks remains inadequate, albeit at the upper edge of the D rating.”

 

GIR scores could be amended when companies choose to improve their corporate governance disclosure practices online, thus, reflect their actual compliance with best-in-class standards.

 

The Shareholder-Rights© initiative bases its reasoning on the notion that investors, with other factors being equal, will prefer to put their money in companies with well-structured and accountable boards, with a high degree of financial transparency, integrity and ethics, and with substantive respect to shareholder rights.

 

In order to entice listed companies to adopt best corporate governance practices, Shareholder-Rights© created its proprietary rating – Governance & Integrity Rating (GIR) on Online Transparency and Disclosure – comprised of a 100-point checklist matrix for best disclosure practices in five corporate governance categories. The grades assigned on the basis of this matrix are straightforward; they range from A – representing real excellence and almost impossible to achieve at the first try – to D for inadequate performance and F for failed.

 

“A growing body of evidence demonstrates today that corporate governance is essential to the protection of shareholder rights,” says Mr. Yasser Akkaoui, Chairman of Shareholder-Rights©, and argues further that “adherence to strict corporate governance principles in a country’s primary and secondary equity markets is a precondition for attracting investors and to achieve vibrancy of capital flows, which are crucial for any country that has a direct interest in improving its competitiveness.”

 

Under this reasoning, Capital Concept has developed the GIR methodology to monitor listed companies’ disclosure on an ongoing basis and has published, in addition to the Lebanon report, a series of three MENA reports – GIR On Online Transparency and Disclosure of the Top 102 Listed Companies, GIR On Online Transparency and Disclosure of the Top 100 Listed Companies Per Industry, and GIR On Online Transparency and Disclosure of Regulators in 9 Countries that give in-depth analysis of the behavior and performance of the rated companies in an effort to expose those that do not comply and advocate for the protection of shareholder rights from regulators.

 

The full rating results for the Lebanese listed companies can be found below:

 

BSE companies scores

 

About Shareholder-Rights©
Shareholder-Rights© by Capital Concept sal (www.shareholder-rights.com), registered in the Ministry of Information of Lebanon under license number 1324/2015, is an online platform that defends shareholder rights worldwide. Constantly rating and reviewing companies’ corporate governance commitment to investor rights by shedding light on corporate or regulatory commitment to corporate governance.

 

For press inquiries, please contact:
Shareholder-Rights©
+961-1-991911
info@shareholder-rights.com





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