In its 2000 Report on the Observance of Standards and Codes (ROSC), the International Monetary Fund (IMF) recommended drafting a law on market discipline and corporate governance in Cameroon. It further suggested strengthening relations with the board of directors to improve corporate governance and internal supervision by the board. Although Cameroon has undertaken several anti-corruption and good governance initiatives since 2000, a 2004 U.S. Department of Commerce Doing Business report, finds that it is still perceived as being "extremely corrupt." In a 2007 Selected Issues report, the IMF recommended promoting stronger corporate governance and using best accounting practices for small and medium-sized enterprises. The Financial Markets Commission was legally established in 1999 with the aim of protecting investors' savings and ensuring the proper functioning of financial markets. The Douala Stock Exchange was inaugurated in April 2003 as the sole securities markets agent in Cameroon, but so far, according to a 2006 Financial Sector Reform and Strengthening Initiative report, it has failed to begin trading activities. Overall, there is insufficient publicly available information regarding Cameroon's compliance with the Organization of Economic Cooperation and Development's Principles of Corporate Governance.

General Overview

There is no publicly available information regarding Cameroon's compliance with the Organization of Economic Cooperation and Development's (OECD) Principles of Corporate Governance. In its 2000 Report on the Observance of Standards and Codes (ROSC), the International Monetary Fund (IMF) recommended drafting a law on market discipline and corporate governance. It further suggested strengthening relations with the board of directors to improve corporate governance and internal supervision by the board. Although Cameroon has undertaken several anti-corruption and good governance initiatives since the ROSC's publication, a 2004 U.S. Department of Commerce (DoC) Doing Business report notes that it is still perceived as being "extremely corrupt". Furthermore, according to a 2007 IMF Selected Issues report, banks are reluctant to finance small and medium-sized enterprises (SMEs) due to the inadequate legal and judicial framework in Cameroon, as well as poor corporate governance and accounting standards. The IMF report recommended promoting stronger corporate governance, and using best accounting practices for SMEs.

As noted in a 2005 IMF Article IV Consultation Report, the "government is determined to enhance governance and tackle corruption" (p. 50), notably through the reform of the judicial system. At the end of 2003, a priority action plan to reform the judiciary system was approved, and the 2005 IMF report states that it is now in its initial stages of implementation. Furthermore, in 2004, Cameroon adopted a new public procurement code to strengthen transparency and the independent oversight of procurement procedures and ratified the United Nations (UN) Convention Against Corruption. An action plan and financial resources were also put together to establish anti-corruption units in all ministries and government bodies.

The Financial Markets Commission (CMF) was legally established in 1999 with the aim of protecting investors' savings, and ensuring the proper functioning of financial markets. Its main objectives are to protect investments, disclose information, supervise the stock exchange and other market participants, and ensure appropriate and ethical conduct in transactions and operations. The Douala Stock Exchange (DSX) was inaugurated in April 2003 as the sole securities markets agent in Cameroon, but so far, according to a 2006 Financial Sector Reform and Strengthening (FIRST) Initiative report, it has failed to begin trading activities. In June 2003, the FIRST Initiative launched a "Capacity Building of the Financial Markets Commission" project for Cameroon, which was completed in June 2005. The aim of the project was to provide the CMF with the appropriate tools to supervise and regulate the DSX and, in a second phase, assist it in the licensing of issuers, brokers, and dealers. However, the project was terminated before the completion of the second phase due to uncertainties about the future of the DSX. The FIRST Initiative recommended implementing a "credible plan for the recapitalization of the DSX" (p. 3), strengthening the credibility of the financial markets, and increasing the participation of companies in the DSX. As a result of the project, there is "greater awareness of the complexities of developing a stock exchange" (p. 3). According to the DSX website, Cameroon has 11 banks which hold 5 percent each of equity in the DSX. The remaining 45 percent of equity are owned by other institutions such as insurance companies. Furthermore, the Netherlands Development Finance Company (FMO) is a 5 percent shareholder of the DSX.

In its 2008 Doing Business report, the World Bank deemed investor protection in Cameroon in 2007 to be in line with the regional average but relatively lower than the OECD mean. The Investor Protection Index is a subcomponent of the World Bank's 2008 Doing Business Indicators, and consists of three dimensions of investor protection: transparency of transactions (Extent of Disclosure Index), liability for self-dealing (Extent of Director Liability Index) and shareholders' ability to sue officers and directors for misconduct (Ease of Shareholder Suits Index). The indexes range between 0 and 10, with higher values indicating greater disclosure, greater liability of directors, greater powers of shareholders to challenge the transaction, and better investor protection. Cameroon scores 6.0 in the disclosure index against a regional average of 4.7 and an OECD average of 6.4. It scores 1.0 in the Director Liability Index against a regional average of 3.1 and an OECD average of 5.1 and 6.0 in the Shareholder Suits Index against a regional average of 5.0 and an OECD average of 6.5.

The Principles

Principle I: Ensuring the Basis for an Effective Corporate Governance Framework

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In its 2000 ROSC , the IMF recommended drafting a law on market discipline and corporate governance. It further suggested strengthening relations with the board of directors to improve corporate governance and internal supervision by the board. Although Cameroon has undertaken several anti-corruption and good governance initiatives since the IMF report, a 2004 U.S. DoC Doing Business report noted that it is still perceived as being "extremely corrupt". Furthermore, according to a 2007 IMF report on Selected Issues , banks are reluctant to finance SMEs due to the inadequate legal and judicial framework in Cameroon, as well as poor corporate governance and accounting standards. The IMF report recommended promoting stronger corporate governance and using best accounting practices for SMEs. However, the available sources do not directly address Cameroon's compliance with the OECD's Principles of Corporate Governance.

According to a 2005 IMF Staff Report, "government is determined to enhance governance and tackle corruption" (p. 50), notably through the reform of the judicial system. At the end of 2003, a priority action plan to reform the judiciary system was approved, and is in its initial stages of implementation, as stated in the 2005 IMF Article IV Consultation report . Furthermore, in 2004, Cameroon adopted a new public procurement code to strengthen transparency and the independent oversight of procurement procedures, and ratified the UN Convention Against Corruption. An action plan and financial resources were also put together to establish anti-corruption units in all ministries and government bodies. The CMF was legally established in 1999 with the aim of protecting investors' savings, and ensuring the proper functioning of financial markets. Its main objectives are to protect investments, disclose information, supervise the stock exchange and other market participants, and ensure appropriate and ethical conduct in transactions and operations. The DSX was inaugurated in April 2003 as the sole securities markets agent in Cameroon, but so far, according to a 2006 FIRST Initiative report, it has failed to begin trading activities.

Principle II: The Rights of Shareholders and Key Ownership Function

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There is insufficient publicly available information regarding Cameroon's compliance with the OECD's Principles of Corporate Governance.

Principle III: The Equitable Treatment of Shareholders

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There is insufficient publicly available information regarding Cameroon's compliance with the OECD's Principles of Corporate Governance.

Principle IV: The Role of Stakeholders in Corporate Governance

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There is insufficient publicly available information regarding Cameroon's compliance with the OECD's Principles of Corporate Governance.

Principle V: Disclosure and Transparency

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According to the 2005 IMF Article IV Consultation report , Cameroon adopted a new public procurement code in 2004 to strengthen transparency and the independent oversight of procurement procedures in Cameroon. Furthermore, in its 2007 report on Selected Issues , the IMF recommended promoting stronger corporate governance and using best accounting practices for SMEs. Nevertheless, there is insufficient publicly available information regarding Cameroon's compliance with the OECD's Principles of Corporate Governance.

Principle VI: The Responsibilities of the Board

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In its 2000 ROSC , the IMF recommended strengthening relations with the board of directors to improve corporate governance and internal supervision by the board. Nevertheless, there is insufficient publicly available information regarding Cameroon's compliance with the OECD's Principles of Corporate Governance.