Economy Profile: Burundi - Doing Business

More documents

Recommendations

Info

Doing Business 2013 Burundi 58 PROTECTING INVESTORS Investor protections matter for the ability of companies to raise the capital they need to grow, innovate, diversify and compete. If the laws do not provide such protections, investors may be reluctant to invest unless they become the controlling shareholders. Strong regulations clearly define related-party transactions, promote clear and efficient disclosure requirements, require shareholder participation in major decisions of the company and set clear standards of accountability for company insiders. What do the indicators cover? Doing Business measures the strength of minority shareholder protections against directors’ use of corporate assets for personal gain—or self-dealing. The indicators distinguish 3 dimensions of investor protections: transparency of related-party transactions (extent of disclosure index), liability for self-dealing (extent of director liability index) and shareholders’ ability to sue officers and directors for misconduct (ease of shareholder suits index). The ranking on the strength of investor protection index is the simple average of the percentile rankings on these 3 indices. To make the data comparable across economies, a case study uses several assumptions about the business and the transaction. The business (Buyer): • Is a publicly traded corporation listed on the economy’s most important stock exchange (or at least a large private company with multiple shareholders). • Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not specifically required by law. The transaction involves the following details: • Mr. James, a director and the majority shareholder of the company, proposes that WHAT THE PROTECTING INVESTORS INDICATORS MEASURE Extent of disclosure index (0–10) Who can approve related-party transactions Disclosure requirements in case of relatedparty transactions Extent of director liability index (0–10) Ability of shareholders to hold interested parties and members of the approving body liable in case of related-party transactions Available legal remedies (damages, repayment of profits, fines, imprisonment and rescission of the transaction) Ability of shareholders to sue directly or derivatively Ease of shareholder suits index (0–10) Access to internal corporate documents (directly or through a government inspector) Documents and information available during trial Strength of investor protection index (0–10) Simple average of the extent of disclosure, extent of director liability and ease of shareholder suits indices the company purchase used trucks from another company he owns. • The price is higher than the going price for used trucks, but the transaction goes forward. • All required approvals are obtained, and all required disclosures made, though the transaction is prejudicial to Buyer. • Shareholders sue the interested parties and the members of the board of directors.
Doing Business 2013 Burundi 59 PROTECTING INVESTORS Where does the economy stand today? How strong are investor protections in Burundi? The economy has a score of 6.0 on the strength of investor protection index, with a higher score indicating stronger protections (see the summary of scoring at the end of this chapter for details). Globally, Burundi stands at 49 in the ranking of 185 economies on the strength of investor protection index (figure 7.1). While the indicator does not measure all aspects related to the protection of minority investors, a higher ranking does indicate that an economy’s regulations offer stronger investor protections against self-dealing in the areas measured. Figure 7.1 How Burundi and comparator economies rank on the strength of investor protection index Source: Doing Business database.
Page 1 and 2:
Economy Profile: Burundi
Page 3 and 4:
Doing Business 2013 Burundi 3 CONTE
Page 5 and 6:
Doing Business 2013 Burundi 5 THE B
Page 7 and 8: Doing Business 2013 Burundi 7 THE B
Page 9 and 10: Doing Business 2013 Burundi 9 THE B
Page 11 and 12: Doing Business 2013 Burundi 11 Indi
Page 13 and 14: Doing Business 2013 Burundi 13 Indi
Page 15 and 16: Doing Business 2013 Burundi 15 STAR
Page 23 and 24: Doing Business 2013 Burundi 23 DEAL
Page 31 and 32: Doing Business 2013 Burundi 31 No.
Page 33: Doing Business 2013 Burundi 33 No.
Page 36 and 37: Doing Business 2013 Burundi 36 GETT
Page 42 and 43: Doing Business 2013 Burundi 42 REGI
Page 60 and 61: Doing Business 2013 Burundi 60 PROT
Page 66 and 67: Doing Business 2013 Burundi 66 Whet
Page 68 and 69: Doing Business 2013 Burundi 68 PAYI
Page 74 and 75: Doing Business 2013 Burundi 74 Tax
Page 76 and 77: Doing Business 2013 Burundi 76 TRAD
Page 84 and 85: Doing Business 2013 Burundi 84 ENFO
Page 96 and 97: Doing Business 2013 Burundi 96 RESO
Page 98 and 99: Doing Business 2013 Burundi 98 RESO
Page 100 and 101: Doing Business 2013 Burundi 100 RES
Page 102 and 103: Doing Business 2013 Burundi 102 EMP
Page 108 and 109:
Doing Business 2013 Burundi 108 DAT
Page 110 and 111:
Doing Business 2013 Burundi 110 tax
Page 112 and 113:
Doing Business 2013 Burundi 112 the
Page 114:
Doing Business 2013 Burundi 114
show all

Economy Profile: Burundi - Doing Business

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?