Nepal is passing through a transition following a 10-year conflict. Growth is estimated to be 4.8% in 2015. The next few years are critical if Nepal is to build on its success, managing its transition while confronting development challenges.
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This report assesses Nepal's
corporate governance policy framework, enforcement, and
compliance practices. It highlights recent improvements in
corporate governance... Show More + regulation, makes policy
recommendations, and provides investors with a benchmark
against which to measure corporate governance in Nepal.
Awareness of the importance of corporate governance is
growing. The central bank has introduced higher corporate
governance standards for banks and other financial companies
as part of a wider program of financial sector reform.
Accounting and auditing standards are being developed. And a
number of draft laws have been prepared that if passed and
implemented should deepen and accelerate the reform process.
The legal framework contains large and significant gaps.
Critical institutions, including the securities board and
company registrar, have little resources or authority. Most
importantly, political uncertainty and the current security
situation have weakened the economy and delayed the passage
of draft legislation. Passing the current draft legislation
is the critical next step. Overall, reform should seek to
enhance key institutions, better protect shareholder rights,
enhance transparency, and increase the effectiveness of
boards. This will require a combination of legislative
change, action by regulators and the public sector, and can
be aided by targeted technical assistance. Show Less -