Governance improvements across emerging markets have been uneven. Nonetheless, the overall progress that we have observed in several areas is encouraging.
Good corporate governance is integral to a company’s sustainability. A healthy system of controls, incentives and values, reflected in features such as a majority-independent board, well-designed executive remuneration scheme and sensible capital allocation framework, should enforce discipline on management to steer the business for the long haul.
Maintaining perspective matters, particularly when we consider emerging markets. Despite ongoing US-China trade discussions, intra-emerging markets trade has blossomed in recent years with China replacing the US as the largest export destination for other emerging markets as a whole.
However, there has also been positive developments in other emerging markets that have flown under the radar.