Abstract
Based on an historical account of the evolution of corporate governance in Colombia, the preliminary finding is that there have been two drivers: progress by the authorities in adopting international regulatory practices into the country’s own regulatory framework and the buy-in of “institutional entrepreneurs,” such as directors, officers, and companies themselves, in promoting “good” corporate governance practices—quickly going beyond what the regulation dictates. This chapter explores how these imported guidelines have been assimilated by all the players and have materially changed the way Colombian corporations view and work within these new rules, so shaping the local business environment. As in other parts, this process of change in corporate behavior has had as much do to the value of these new rules to the internal workings of companies as the conviction that they make good financial and business sense—as seen from the swift progress in implementation in a group of large corporate players. Against this backdrop, the chapter goes on to explore the evidently positive network effects of interlocks within and across multiple Colombian economic groups, composed mostly of large cap and medium cap companies. The chapter concludes with the results of original market research, confirming that interlocks have acted as a catalyst in accelerating the adoption of “good” corporate governance practices.
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Notes
- 1.
European Commission. Green Book. The EU corporate governance regulations (2011), page 2.
- 2.
Colombia is a country of civil-law tradition, where laws and rules have had a high importance in moving corporate topics (governance, among others) toward good practices.
- 3.
The Commercial Code (Código de Comercio, ley 222 de 1995).
- 4.
Law 446 of 1998.
- 5.
The model was expressed in a payment unit called UPAC (Unidad de Poder Adquisitivo Constante), linked to inflation.
- 6.
The Superintendencia de Valores, which were substituted by the Superintendencia Financiera in 2005. The Superintendencia Financiera included securities and banking supervision functions.
- 7.
The Corporación Andina de Fomento, a Latin American development Bank.
- 8.
Initial Public Offering of Ecopetrol stocks in 2007. Previously it was a fully state-owned firm.
- 9.
At the start of 2010, Colombia had 181 companies listed in the stock market, the BVC (Bolsa de Valores de Colombia), yet it is estimated that only about 10% of these stocks had high liquidity levels. Despite a high growth in total market capitalization due to higher valuations of previously listed companies, issuances of private debt heavily outweighed listing activity, as well as much trading beyond a small core of very large companies. Market capitalization as a proportion of GDP grew over 20% annually over the decade to a level of 40% in 2019, and the stock market value of corporate debt increased at a 17% annual rate to reach 6,4% of GDP (Clavijo, González & Vera, 2011; Sanín & Arteaga, 2012).
- 10.
MLC the initials of Multi-Latin Companies, or multilatinas—firms that have expanded to other Latin-American countries.
- 11.
GEA initials of what is known informally as Grupo Empresarial Antioqueño, not formally an economic group in itself, but rather a system of corporate crossholdings between three economic groups: Grupo Sura, Grupo Nutresa, and Grupo Argos, headquartered in the traditionally industrial city of Medellín, capital of Antioquia, giving origin to the informal name GEA.
- 12.
Superintendencia de Sociedades, or Supersociedades—the supervisory and regulatory body of publicly traded companies in Colombia.
- 13.
Confecámaras, la Cámara de Comercio de Bogotá.
- 14.
Report on the Observance of Standards and Codes (ROSC): an initiative from the World Bank and the International Monetary Fund to monitor compliance with high-quality standards included into the structure of the international financial architecture.
- 15.
Financial Sector Assessment Program (FSAP): an initiative from the IMF and World Bank to assess and develop the countries’ financial sector.
- 16.
The CAF (Corporación Andina de Fomento, currently Banco de Desarrollo de América Latina): a development bank of Latin America.
- 17.
The survey act as compliance report on country corporate governance code that firms submit every year to the regulator, the Superfinanciera.
- 18.
These three listed companies are part of the system of corporate crossholdings of mostly listed companies known informally as GEA (Grupo Empresarial Antioqueño, though not formally a company group); their boards were at the time interlocked
- 19.
AFE initials of Asociación de Fundaciones Empresariales y Familiares, an association of non-profit and family firms.
- 20.
ANDESCO are the initials of Asociación Nacional de Empresas de Servicios Públicos y Comunicaciones, an association of utilities and telecommunications companies.
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Sanín, E., Pardo Aragón, Ó. (2023). Colombia. In: Callund, J., Jiménez-Seminario, G., Pyper, N. (eds) Corporate Governing in Latin America. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-85780-6_9
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