CHAPTER III CORPORATE GOVERNANCE This chapter assesses the progress achieved in Corporate Governance, a relatively new area in the country in terms of diffusion and implementation, which is why progress in this field remains modest and the challenges huge. The APRM Base Document defines Corporate Governance as a system where corporations have an internal control and are forced to account including all forms of private sector companies and public. Good Corporate Governance contains seven distinct characteristics: discipline, transparency, independence, accountability, fairness, responsibility towards employees and social responsibility. Following are the objectives on which the progress is assessed. To promote an enabling environment and effective regulatory framework for economic activities; To ensure that corporations act as good corporate citizens with regard to Human Rights, civil Social responsibility and environmental sustainability; To promote the adoption of codes of good business in pursuing the corporation’s objectives; To ensure that corporations treat all their stakeholders, including shareholders, employees, communities and suppliers fairly; To provide for accountability of corporations, directors and employees. Principles, Codes and Standards APR Panel of Eminent Personalities (APR Panel) recommended that Mozambique appoints a National Corporate Governance Regulator to supervise the development of the capital markets. 212. The Mozambican capital market has only one regulator that guarantees the oversight of its activities, namely the Bank of Mozambique. Up to present, there are no significant developments in terms of an approach in line with current international best practices for Corporate Governance. Notwithstanding some advances in the legal framework for the capital market in Mozambique, few aspects of Corporate Governance are reflected in it, and the establishment of a National Corporate Governance Regulator which could not only lead the creation and validation codes, but also define the mechanisms for monitoring and supervision it’s the challenge. The APR Panel also recommended that Mozambique defines an appropriate Corporate Governance model by adopting a National Corporate Governance Code. 213. With regards to the need to strengthen the regulatory framework for Corporate Governance, the main concern presented as a priority relates to the appointment of a National Corporate Governance Regulator, responsible for producing a system for regular reporting on regulatory activities, policies, strategy and action plan to implement the core principles of capital markets 76