Latin American Capital Markets

456 MIKELUBRANOtees, with the audit committee dominated by independent directors. Perhaps mostsignificantly, the code provides that disputes between shareholders and the companywill be submitted to arbitration by an outside panel, in this case the Commercial ArbitrationPanel of the Chamber of Commerce of Medellfn.Colombian institutional investors report that Resolution 275 has had positiveeffects on transparency.The resolution has helped move corporate governance issuesup the public agenda and garnered a great deal of public attention. Indeed, Resolution275 accelerated the very active collaboration of the Pension Funds Association, theConfederation of Chambers of Commerce, the Stock Exchange of Colombia, and theSuperintendency of Securities in jointly promoting best practices in corporate governancethroughout the country. This degree of formal voluntary cooperation amongrepresentatives of issuers, investors, intermediaries, and government is perhaps uniquein an emerging market. It is probably fair to state that one reason cooperation hasbeen possible is precisely the lack of prescription and the opening for voluntary initiativethat Resolution 275 presented to the private sectorIt remains to be seen how well companies will actually comply with their newcodes and how enforceable their obligation to do so will be in the longer term.Theefforts that companies have expended to comply with Resolution 275 (preparation,board approval, and submission to the annual shareholders meetings) may have theunintended consequence of discouraging later amendment of the initial compliancetypecodes produced by less progressive companies. It will be particularly interestingto follow the development of the initial codes over the next few years. Will there becompetition among issuers to adopt more shareholder-friendly provisions? Or will acertain set of minimum standards be seen as sufficient? Will the pension funds play anactive role in pushing issuers to do more? Will the market permanently bifurcate intoone set of issuers that take a progressive stance and another interested only in barecompliance? What will be the experience with enforcement? Will recourse to thecourts remain the ultimate tool for enforcement or will actions by the Superintendencyof Securities and arbitration take on greater importance? And what will be thecontribution to capital market development? It will require at least a few years beforeany firm conclusions can be drawn.ConclusionsAs stated at the outset of this chapter; it is too early to determine the lessons of recentexperiences with corporate governance reforms. However, the encouraging re-Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub