Abstract
Egypt is an emerging economy that has in recent years been exposed to several severe economic, political, and social shocks, all within a relatively short period of time. This has amplified the importance of the rule of law, regulatory enforcement, and corporate governance best practices, in order to restore the investing public’s confidence in the Egyptian market. Historically, the focus on corporate governance had preceded these recent events. Building on this history, today’s corporate governance landscape in Egypt is much more robust with more effective regulators, clearer streamlined governing rules, and better corporate governance literacy. This paper identifies four main areas of corporate governance research in Egypt: firm performance, reporting quality, corporate responsibility, and auditing. While extensive research has already been conducted in these areas, the paper provides some recommendations for further enhancing its quality. These pertain mainly to the development of comprehensive corporate governance databases, the increased focus on emerging and current market-relevant aspects of corporate governance, and the release of more proprietary data by regulators.
Highlights
This study surveys corporate governance academic papers that focus on Egypt
The first Egyptian Stock Exchange was established towards the end of the 19th century, corporate governance gained momentum starting in the late 1990s
This was triggered by enacting many laws, establishing a regulatory framework, several country assessments by the World Bank, and the introduction of the Egyptian Code for Corporate Governance Code with subsequent revisions, and the establishment of the Egyptian Financial Regulatory Authority
Summary
This study surveys corporate governance academic papers that focus on Egypt. The objective is to identify the main facets of corporate governance research, especially from the accounting and finance disciplinary perspectives. This dedicates the presence of complementary monitoring internal and external mechanisms, which collectively constitute the CG system or the ―corporate governance mosaic‖ as Cohen, Krishnamoorthy, and Wright (2004) describe it Emerging economies, such as Egypt, naturally have developed regulatory frameworks with the primary objectives of increasing investor confidence in its capital market, combating corruption (including any form of managerial corporate malfeasance), and enhancing the sharing of information and its credibility. This leads to a natural inclination towards creating a CG landscape that is more conducive to effective monitoring, interest alignment, and information sharing mechanisms, such as the board of directors, audit committees, the external auditor, internal controls, fair disclosure, and executive compensation schemes. The remainder of the paper is organized as follows: Section 2 presents the institutional background of CG in Egypt, Section 3 presents the literature review, Section 4 proposes future directions for corporate governance research, and Section 5 is the summary and conclusion
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