Aligning with corporate governance standards
27 January, 2011
Aligning with corporate governance standards

Georgian companies can employ a guide book on corporate governance standards worked out by International Finance Corporation (IFC) within the frames of Georgia Corporate Governance project that was completed this January. The manual is a summary of recommendations and consultation the IFC project has been providing Georgian companies for four years based on the best international practice. 
IFC, a member of the World Bank Group, announced about successful completion of its Georgia Corporate Governance project and summarized the results of its

program to help Georgian companies improve their corporate governance practices. Following the principles of responsibility, accountability, and transparency enables firms to become more profitable and attract investment.
The questioned project was a follow up of the similar program launched in 2003 on purpose to introduce the corporate governance concept and principles in Georgian reality. Both aimed at establishing corporate governance principles at Georgian joint stock companies through training seminars, private consultations and pilot programs.
The IFC project helped improve the legal environment regulating corporate governance issues, and facilitated adoption of a voluntary Corporate Governance Code by the Association of Banks of Georgia (ABG). IFC delivered seminars and workshops on legal and financial aspects of corporate governance, individual consultations, and a specially designed Pilot Program for selected companies and banks. Twenty-one companies and banks improved 50 policies/procedures, and all of them reported improved performance as a result of making corporate governance improvements.
IFC recently published the Georgia Corporate Governance Manual, which provides a comprehensive overview of Georgia’s regulatory requirements related to corporate governance. The publication will help Georgian companies improve corporate governance standards and practices beyond completion of the IFC project. The project presented the manual to the key counterparts during the project closing ceremony on January 21, 2011. From 2006 to January 2011, IFC Georgia Corporate Governance Project was run in partnership with BP and its oil and gas co-venturers and the Canadian International Development Agency.
“Good corporate governance is one of the key preconditions for attracting investors, domestic as well as international,” Maia Tevzadze, Project Manager for IFC Georgia Corporate Governance Project, told Georgian Journal.  “Through the IFC project activities we helped Georgian companies become more attractive for investors. Our publications, especially Georgia Corporate Governance Manual, will serve as practical guidance for raising corporate governance standards in the future.”
According to Tevzadze, researches of companies and banks they conducted in 2004 and 2008 showed that companies progressed pretty well from the point of view of adopting corporate governance standards in practice. The practice turned out much more successful for banks that could attract more than USD 300 million thanks to improved corporate governance principles.
Companies operating in non-financial sector appear less successful from the point of view of attracting investments for they have much limited access to financial resources compared to banks. But Tevzadze believes that they will go on profit in a long-run as far as corporate governance principles are not calculated on short-term prospects.
Georgian companies showed a big interest in adoption of international standards of financial accounting [as it is key issue to attract investors] and in internal control skills. 
According to Zurab Gvasalia, President of ABG, importance of corporate governance principles became obvious after financial crisis that made clear that companies with well-developed corporate governance skills escaped the crisis with the least losses. On the other hand companies got convinced that a full package of principles must be established.
“It raises transparency of a company and thus gains the trust of society that is the key assets of all companies actually,” Gvasalia told GJ. “And the Corporate Governance Code we worked out and signed is a sample of this.  Standards we put in this code are much higher than the law and banks understood that if you want to enjoy the effect of corporate governance you have to adopt all of its principles without exception, otherwise it loses effect.”
Pursuant to this understanding Georgian banks work on adoption of the institute of corporate secretary  they lacked in practice up to day.

Other Stories
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
Mziuri Park in Tbilisi to be renovated soon
It was the dream of prominent Georgian writer Nodar Dumbadze that when the original Mziuri park was constructed and opened in 1892 that it should be a park for children,
Winemakers to produce Kvanchkara in its place of origin - Racha
Khvanchakara is a semi-sweet Georgian red wine which originates from Racha, in the western part of Georgia. Kvanchkara is made of two types of grape Mujuretuli and Aleksandrouli.
The level of Georgian wine and Chacha exported has increased
The National Wine Agency of Georgia has recently published statistical information about the level of Georgian wine and Chacha exported between January and July, 2018.
New fire engines to be Manufactured in Georgia
The Acting Head of the Emergency Management Agency Shalva Khutsishvili said that the old Zili fire engines (which were made in the USSR) will be phased out and replaced with new ones, manufactured in Georgia.
Georgia witnesses a record number of tourists
The Georgian National Tourism Administration publishes statistical information about international visits to Georgia.
Canadian businessman plans to build a hotel in Bakhmaro
Canadian businessman Vadim Malishev plans to build a hotel in Bakhmaro resort, Guria, in the western part of Georgia.
Coffee Factory will open in Tbilisi in October
The first coffee factory (which will be located on the Kakheti highway) in Tbilisi will open in October.
Places in Georgia where real estate is the most expensive
The real estate market in Georgia is growing annually. In Tbilisi as well as other regions of Georgia new developments are increasingly taking place.
How much does a vacation cost in Tbilisi?
It is the middle of summer and those who have not yet taken a vacation are looking for an appropriate place for sure!
The price for extreme sports in Georgia
Georgia offers a variety of options to extreme sport lovers.
The number of Georgians who own property abroad increases
The number of foreign properties owned by Georgians is increasing.
How much does Taxi cost in Tbilisi?
Stories how Taxi drivers try to deceive passengers and charge them with more money than they should pay are known for everybody all over the world.
What are the highest paid areas in Georgia
According to the data collected by the National Statistics Office of Georgia in the first quarter of 2018 the highest paid jobs in Georgia are found in the financial and insurance fields.
Exchange Rates
GEL Exchange Rate
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange