A Critical Analysis of the Revised Ethiopian Commercial Code in Light of OECD’s Principles of Corporate Governance with Emphasis on Roles and Responsibilities of the Board of Directors of Share Companies
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Date
2022-06
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Addis Ababa University
Abstract
The aim of this study is to critically analyze the roles and responsibilities of BoDs of SCs as contained in RCC and Banks’ Corporate Governance vis-à-vis the Principles that are included as in OECD’s Principles, which are accepted as the international best practice to be emulated. The study has utilized a qualitative research approach and exploratory research design. The theoretical and empirical reviews of the pertinent literature, as well as the interview conducted, have revealed that RCC has gone leaps and bounds in embodying what is expected by the sixth principle of OECD. Yet, there are still observable lacunae like failing to require ethical standards from BoDs, failing to mandate BoDs to decide on remuneration issues, and failing to put a requirement in place that ensures disclosure and communication mechanism. All of these and other deficiencies of RCC relating to corporate governance call for promulgation of a Code of Corporate Governance by the Ethiopian Council of Ministers that obliges all financial and non-financial SCs and a Directive by MoTRI the ensures the effective implementation of the Regulation to be passed by the Council of Ministers. An autonomous government organ that oversees the effective implementation of the Code of Corporate Governance should also be established