Let’s start with the macro: the government of our country seen from the outside. The World Bank’s Worldwide Governance Indicators (WGI) are based on a comprehensive study of the quality of government of 215 nations in the period 1996-2014 that rates performance in 6 areas of governance:
- Freedoms and Accountability
- Political Stability and Absence of Violence / Terrorism
- Efficiency of Government
- Regulatory Quality
- Rule of law
- Control of Corruption
These aggregate indicators combine the views of a large number of companies, citizens and experts surveyed in industrialized and developing countries. In addition, they are based on more than 30 individual data sources produced by various research institutes, non-governmental organizations, international organizations and private sector companies.
As the graph shows, Chile shows a higher performance than the region (reflecting this is our credit risk classification), which is part and parcel of the OECD rich countries. It also has deteriorated over the last 10 years in terms of political stability and accountability.
To view this enlarged chart, click here
Let us now turn to the micro. The question that should be asked is: Do my business and my business have good governance? There is no disaggregated information or indicators of third-party studies here.
To answer this question, we must begin by asking ourselves other questions:
Do I have a strategy that incorporates the challenges of innovation and adaptation to change?
Do I have competent and experienced professionals who contribute the knowledge required by my company or business?
Do I have the ability to anticipate opportunities and risks proactively or simply act reactively?
Do I have people who help us improve the quality of our business with different looks and the ability to put them into execution?
Do I have a proper governance structure to manage my family business?
Juan Pablo Bórquez Y.
Partner Director BY Advisors