Accra, Ghana Tuesday 30 th October 2007 Neil Harvey – CEO, Renaissance Africa Corporate Governance & Market Development in Africa’s Capital Markets African Stock Exchange Conference

Page 2 Content  Why Corporate Governance is important  Corporate Governance and foreign capital  Weaknesses in Corporate Governance  General principles to guide policymakers

Page 3 Defining Corporate Governance Protecting interests of stakeholders Corporate governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a stream of return on their investment.  How do suppliers of finance get managers to return some of the profits to them?  How do they make sure managers do not steal the capital they supply or divert it for other uses?  How do they control management?

Page 4 The importance of good Corporate Governance Long term ambitions  Promote a healthy environment for long-term investment  High valuations  Low cost capital  Not just for the bad actors but for all market participants

Page 5 Are international investors needed? Driving development  Drive valuations to international levels  Africa will require the capacity of a global investor base  International and domestic markets are not parallel universes  Africa businesses will continue to be led, managed and controlled by Africans

Page 6 Problems in developed markets Best practice to be effective  No foolproof model  Structure in less important than the way in which structure is operated “No one model is superior” Insert picture/graphic/chart

Page 7 Five useful principles AccountabilityAuditPeople  People are more important than processes  Shareholder accountability  External audit must be independent and penetrating  Disclosure and transparency are crucial to market integrity  There must be an appropriate regime of regulatory discipline to back these obligations TransparencyDiscipline

Page 8 Conclusions The road to success  Good Corporate Governance  Bad Corporate Governance A strong regulatory framework is critical to market development and leaders who can respond to a changing environment are necessary to ensure that frameworks adapt to create an environment that rewards transparency, encourages investment and protects all market participants