The Lebanese Transparency Association (LTA) & The Lebanon Corporate Governance Task Force (LCGTF)

1. The Lebanese Transparency Association (LTA)&The Lebanon Corporate Governance Task Force (LCGTF) Badri El Meouchi Tunis, June 2008

2. Lebanon Corporate Governance Task Force (LCGTF) WHEN, WHY, WHO & GUIDELINES OF WORK Lebanese Transparency Association

3. When: Created in November 2002. Why / Who: An Initiative of LTA’s Corporate Governance Program, LCGTF seeks to promote good corporate governance in Lebanon. It is a permanent working group, consisting of prominent representatives from the Lebanese private, public and academic sectors, as well as civil society. LCGTF: When, Why / Who Lebanese Transparency Association

4. Creation of Committees: 1- The Accounting and Auditing committee 2- The Legal and Regulatory committee 3- The Information, Communication, and Media committee 4- The Membership and Funding committee What are the Guidelines of Work? Lebanese Transparency Association

5. B) Use of available principles as a base: 1- Cadbury Report 2- OECD Principles 3- World Bank Group’s Reports C) Assessment of Lebanon’s current compliance level. D) Looking for innovative communication channels while promoting better CG standards at the financial markets' level, the private level, and the public level. What are the Guidelines of Work? Lebanese Transparency Association

6. Raising Awareness Large Awareness Raising Events Smaller technical workshops targeting board and top management of individual companies Website Partnering with Business Associations and Universities ACTIVITIES & TOOLS Lebanese Transparency Association

7. Developing Tools: Survey Carried out in 2004, to gain more understanding on the status of CG in Lebanon Codes FOEs & SMEs (June 2006) CG Guidelines for member banks of the Union of Arab Banks (March 2008) Listed Companies (Draft in progress) ACTIVITIES & TOOLS Lebanese Transparency Association

8. Modernizing Laws - Recommendations to modernize the Lebanese Code of Commerce - Recommendations to include CG guidelines for banks as official guidelines of the Banking Control Commission (which regulates and supervises Lebanese banks) ACTIVITIES & TOOLS Lebanese Transparency Association

9. Training - Media Training - Four training courses to be launched in Summer 2008 1. CG course for owners and directors of FOEs 2. Board Development Series 3. CG course for board members and directors in the banking sector 4. CG course for Auditors and Accountants (focusing on the internal/external audit function and the role of audit committees) ACTIVITIES & TOOLS Lebanese Transparency Association

10. Consultancy Services Developing a national capacity to provide CG consultancy services to Lebanese companies (Capital Concepts, 2007) - Carry out CG Assessments and Reviews, including recommendations and action plan. (Sabis, 2007; LBC and Butec, 2008) ACTIVITIES & TOOLS Lebanese Transparency Association

11. Raising Awareness Challenges: - Engaging Stakeholders (through Activities mentioned earlier): Companies; Business Associations; Chambers of Commerce; Academics; Stock Market Regulators; Bank Regulators; Media - Making the Business Case for CG Challenges, Successes and Lessons learned (Throughout program implementation) Lebanese Transparency Association

12. Raising Awareness (cont…) Successes: Continuous interest of stakeholders and high levels of attendance in ongoing events Increased understanding of CG within Lebanese private sector - Increasing number of other organizations and consultancy firms focusing on CG Challenges, Successes and Lessons learned Lebanese Transparency Association

13. Raising Awareness (cont…) Lessons Learned: - Importance of identifying local partners - Targeting decision makers - Media outreach Challenges, Successes and Lessons learned Lebanese Transparency Association

14. Challenges, Successes and Lessons learned Developing Codes: Challenges: • Identifying a credible drafting process: • Reputable authors (drafting team) • Making sure that it is an inclusive process (consultation phases with stakeholders – encourages “ownership” of product by stakeholders) • Peer review by international experts (eg; GCGF, CIPE, IFC) • COMMUNICATE!!! (fewer will be interested in the code if they do not know it exists!) • Identifying Case Study companies willing to try the code Lebanese Transparency Association

15. Developing Codes (cont…) Successes (code for FOEs and SMEs): - More than 15,000 copies distributed (most often on demand from companies and/or business associations, media, etc…) - Increasing number of companies committed to apply CG principles embodied in the code - Growing demand to develop more sector specific codes Challenges, Successes and Lessons learned Lebanese Transparency Association

16. Developing Codes (cont…) Lessons Learned: - In case of large drafting team, assign clear responsibilities to team members! - Do not re-invent the wheel – use existing international standards & principles, and adapt them to the national context - Don’t just distribute copies of the code – follow-up with those who receive it: to gage their level of commitment - Within companies, only trust commitment from the top (when cleaning your staircase, you should start from the top!) Challenges, Successes and Lessons learned Lebanese Transparency Association

17. Modernizing Laws Challenges: - Lebanese Context: - Commercial law in Civil Law systems is characterized by far less flexibility than in Common Law systems - The Lebanese Code of Commerce (LCC) presents several obstacles in the application of CG best practice - Getting the cabinet minister’s ear - Lobbying parliament for change Challenges, Successes and Lessons learned Lebanese Transparency Association

18. Modernizing Laws (cont…) Successes: - Extensive recommendations have been prepared to modernize the LCC - The Minister of Economy and trade is on board Private sector and business/economic associations on board Lessons Learned: - Do not lobby Parliament in times of Political crisis! Challenges, Successes and Lessons learned Lebanese Transparency Association

19. Training Challenges - Ensuring there is demand from appropriate stakeholders - Choosing appropriate trainers, and developing Curriculum Successes: - Increasing demand from stakeholders - One curriculum (out of 4) so far developed (with IFC and AUB) - Increasing number of articles in Media (result of media training) Lessons Learned: None yet (courses to be launched Summer 2008) Challenges, Successes and Lessons learned Lebanese Transparency Association

20. Consultancy Services Challenges: Developing Capacity and Identifying experienced consultants Gaining private sector’s trust and interest in this service - Being able to distinguish between ‘serious’ companies and those who just want to improve their image! (Genuine commitment from the top) Challenges, Successes and Lessons learned Lebanese Transparency Association

21. Consultancy Services (cont…) Successes: - Growing number of companies seeking advice - More importantly, more companies willing to pay for advice As a result of these and other activities/services: becoming national reference on CG Lessons learned: Develop capacity before stating availability of service! It is hard to build a credible reputation, but easy to undermine it! Challenges, Successes and Lessons learned Lebanese Transparency Association

22. Results: More than 2,000 participants in events More than 25,000 hits on website More than 15,000 copies of first code distributed More than 15 companies committed to apply code Four companies/banks already applied CG principles Impact: Increased demand for CG Assessments and Reviews Increased demand for Advisory service Increased demand for training courses In general, tangibly higher level of national awareness RESULTS & IMPACT Lebanese Transparency Association

23. THANK YOU Visit our website @ www.lcgtf.org Lebanese Transparency Association