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Healthy Governance, Healthy Returns
I recently had the fortune of being asked to speak at the APEC Business Ethics for SMEs Forum on the topic near and dear to my heart — governance. Here are some of the key messages.
Good governance is a key attribute we look for in our investments as we see it as a key mitigator of risk and a core pillar for long-term success.
My view of governance may be a little unconventional because I am not an academic or expert in the field — I am a pragmatist and I write from my experiences. I see governance as the measurable institutionalisation of trust, values and ethics.
I think of governance across four separate layers:
- Sovereign
- Industry
- Corporate
- Individual
Sovereign
Sovereign governance essentially pertains to how safe it is to do business in the country where the startup is registered or operates in. Transparency, rule of law, fairness to foreign investors, and the stability of government are all very important factors to consider.
As a small minority stake investor with a global mandate, it is very difficult to resolve local troubles with an investment if the local business environment lacks the aforementioned attributes. Local investors might know the…
