Poor corporate governance puts off investors

Attracting investment, restoring confidence and helping the economy rebound may rank high on the Greek government’s agenda, but one of the factors keeping Greek assets off the radars of foreign investors – the corporate governance of local enterprises – is becoming increasingly important.

While banks have been given strict guidelines, due to their recapitalization, and have appointed experienced and independent managers, other Greek enterprises, listed or not, have neglected this important areas.

According to analysts and market professionals, major adjustments are necessary in the private sector of the Greek economy. They argue that domestic enterprises need a restart on the governance level, as better protection for shareholders and higher standards will be instrumental to the recovery of the economy. The improvement in corporate governance will also lead to better access to funding, higher valuations and better corporate performance.

“It would certainly be an important structural reform and could assist in attracting healthier domestic and foreign investments from abroad,” Athanasios Vamvakidis, global head of foreign exchange strategy at Bank of America Merrill Lynch, tells Kathimerini. “The improvement in corporate governance would be a sign of a state that functions well,” he adds.