Private sector should be source of institutional reforms - official

ArmInfo. Corporate governance is extremely important, especially during crises as, to render assistance, the government must know where the institutional economic bases are concentrated, Armenia's Deputy Minister of Finance Avag Avanesyan stated at an annual conference organized by the Corporate Governance Center, on June 30.

"Without corporate governance or established practice the government will not protect the institutional part of economy or the institutional part applying poor practices," he said. 

"We often mean only the government when we speak of institutional reforms. But institutional reforms begin in the private sector. And without corporate governance it is not an institutional reform, but only a good intention," Mr Avanesyan said.

A similar situation is in tax collection. Well-established corporate governance practice will improve resilience to any economic shocks and tax collection.

Speaking about the area of public procurement, the official pointed out certain problems in the absence of corporate governance principles. "Because of this, in public procurement, we are more often focused not on the procurement process and the supplier, but on who works for this supplier, which creates problems in the context of long-term management," he said.

The official mentioned a number of areas, which, without an appropriate level of corporate governance, create social problems. In this regard, as an example, he pointed to the gaming sector, which is licensed by the Ministry of Finance.

"That is, areas whose purpose is to make a profit harm the public. On the one hand, this may seem normal, since this is a business and it should be so. But the fact is that the principles of their corporate governance should be deeper. Both the public and the state should demand that through sustainable management, transparency, these companies try to minimize the harm done to the public. In such areas, corporate governance is extremely important," Avanesyan stressed.

This year's conference is under the slogan "Cooperation for sustainable corporate governance."

Among the participants were officials of the Ministry of Justice, Ministry of Economy, members of the Corruption Control Commission, representatives of Commercial Law Development Program (CLDP), Center for International Private Enterprise (CIPE) and Corporate Governance Center.

The CLDP and CIPE sponsored the event.