The African Private Equity and Venture Capital Association (Avca), a pan-Africa industry association, has revealed the critical role of corporate governance in the region in establishing greater investor interest in the third edition of its Africa Sustainability Study.
The 2018 Africa sustainability study: Creating value through corporate governance shows that 85 percent of private equity-backed portfolio companies and fund managers report that improvements made by the implementation of corporate governance initiatives have led to a boost in value creation.
The study explores how investors in Africa have promoted the adoption of corporate governance frameworks within their portfolio companies to drive value creation. Corporate governance has been a vital component of ESG standards in Africa, regularly implemented to drive job creation and improvements in job quality.
Alongside greater commitments to better ESG standards in African financial life generally, and the increased role of development finance in encouraging such policies, the study sets down a marker for companies to follow.
Commenting on the study, Enitan Obasanjo-Adeleye, director and head of research at Avca, says in a statement: ‘This is yet another important piece of research to add to the growing story around sustainable and responsible investing in Africa.’
Albert Alsina, chair of the Avca corporate governance sub-committee, adds: ‘As an industry, we recognize how critical corporate governance frameworks are to investing in Africa. Avca has the ability to reinforce these views by sharing fund manager insights and channeling knowledge exchange into action.’
The survey presents evidence from 277 private equity-backed companies operating across the continent.
