Corporate Governance in Branches of Foreign Companies in Ethiopia: Any Different from Local Ethiopian Companies?

142 Pages Posted: 10 Nov 2014

Date Written: March 2014

Abstract

Corporate governance is understood as a system of governance of companies. At present, it is becoming an essential component of modern corporations which can determine the success or failure of companies. Due to this, in the age of corporations, countries in the world have started to look seriously the governance of companies which operate in its land.

There are various forms for foreign companies to operate business in Ethiopia. Establishing a branch of foreign company is one of such forms in order to operate business in Ethiopia. In Ethiopia, branches of foreign companies are highly engaged in various business sectors.

The Ethiopian legal regime concerning branches of foreign companies has insufficient provisions on some governance aspects of such companies. With the absence of sufficient laws, there will be multifaceted impacts on those parties or stakeholders having various dealings with branches of foreign companies in Ethiopia. Such stakeholders include, but not limited to, creditors, the government, employees, customers of the branch foreign companies and the public in general.

This thesis is concerned with investigating corporate governance of branches of foreign companies operating in Ethiopia. It tries to identify major problems in the Ethiopian law relating to governance of branches of foreign companies. Such problems would have tremendous negative consequences in the future unless required measures are taken to correct the problems. Hence, the thesis is intended to inform the stakeholders, particularly, the government to make reform of laws and other kinds of measures.

Keywords: Ethiopia, Corporate Governance, Branches of Foreign Companies

JEL Classification: Corporate Governance

Suggested Citation

Mitku, Belaynew Ashagrie, Corporate Governance in Branches of Foreign Companies in Ethiopia: Any Different from Local Ethiopian Companies? (March 2014). Available at SSRN: https://ssrn.com/abstract=2520735 or http://dx.doi.org/10.2139/ssrn.2520735

Belaynew Ashagrie Mitku (Contact Author)

Addis Ababa University ( email )

King George VI St
Addis Ababa, 1000
Ethiopia

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