We are very pleased to be part of AmCham and are looking forward to driving innovation forward in Latvia.
Mikko Fernström, General Manager, Biogen Latvia
AmCham has always emphasized the importance of transparency and integrity of the business environment in Latvia. Recently an analysis of the impact of good corporate governance on the ability of companies to attract financing was carried out further supporting the notion that integrity and transparency in businesses have tangible effects in relation to the ability to attract financing.
The Baltic Institute of Corporate Governance (BICG) together with the association Finance Latvia analyzed the importance of good corporate governance for companies that wish to attract financing. Among the banks participating in the study were AmCham members SEB, Luminor and Citadele. The results of the study indicate that corporate governance practices are given up to 25 percent of weight in company credit ratings assigned by the largest banks operating in Latvia.
Results of this analysis were presented in the discussion "How does corporate governance impact on attracting funding?", organized by BICG together with the association Finance Latvia on January 30, aiming to raise awareness of governance pre-conditions for companies that want to attract funding for further development. Based on experience shared by Swedbank, SEB, Citadele, Luminor and Baltic International Bank, the impact of corporate governance practices on company credit ratings is 10 to 25 percent.
In assessing the allocation of funding for company development, banks are evaluating not only a company's finances and business plan, but also focus on corporate governance related aspects such as the reputation and identity of the owners, the transparency of the ownership structure, operational experience and reputation, the professionalism of management, risk management and transparency and rationality of decision making processes.
„By assessing company governance, integrity in the broader sense of it becomes an essential criteria. This includes attitude towards the state and the payment of taxes, attitude to legislation and regulatory norms, relations with the company's creditors, clients and suppliers, potential corruption risks, shareholder relations and other aspects," notes Karlis Danēvičs, member of the Management Board of SEB in Latvia, co-chair of the Credit Committee of Finance Latvia and member of the Board of the BICG.
Banks also assess how a certain company makes operational and strategic decisions, how transparent it is, what is the quality of information it provides, how risks are governed and what relationship approach is applied to business partners.
Zinta Jansons, Vice President of AmCham Latvia and Partner at Ellex Klavins attended the discussion. She observed that the issues identified as part of the analysis relate directly to the values of AmCham and its members. Sound corporate governance practices are essential for a positive impact on sustainable economic growth of each individual company and the broader business community.
AmCham works hard to accomplish its goals and is a voice in the business community that is heard.
Filips Klavins, Managing Partner at Ellex Klavins