How Corporate Governance Is Shaping Investment Confidence in Uzbekistan

Predictability: What Investors Really Want

At a recent plenary session, Odile Renaud-Basso, President of the European Bank for Reconstruction and Development, underlined a key point: investors value predictability — especially over the long term. Corporate governance is what enables it.

Good governance gives investors confidence that a company’s leadership operates within a transparent and coherent strategy — not on a whim. It provides a structured decision-making system and mechanisms for oversight. Where these mechanisms function well, investors feel a sense of stability: processes are transparent, leadership is accountable, and risks are managed.

The Board’s Role: Hands-Off, But Never Detached

The executive team — CEO, general director, senior management — runs the business. A board of directors or supervisory board should not interfere in day-to-day operations. But neither should it be so distant that it loses sight of what’s really happening inside the company.

A firm might report excellent quarterly results. But as an investor, numbers alone do not reassure me. I need to know the company has a competitive strategy. That it is operating legally and ethically, no fraud lurking beneath the surface.

That is why the function of independent oversight is so crucial — and must truly be independent. The board must represent the interests of all stakeholders: shareholders, employees, clients, regulators — and the state, if it holds a stake.

Uzbekistan’s Path to Mature Governance

Corporate governance in Uzbekistan is still in its early stages. That is understandable: the legacy of centralised management runs deep. Delegation of authority remains uncommon. But for investors, the key signal is whether a company is open to transparency and dialogue.

Appointing independent directors and transferring real authority to them sends a message: this is a company run not just for one owner, but in the interests of all stakeholders. This, in turn, creates the kind of trust that President of Uzbekistan Shavkat Mirziyoyev has described as essential — trust as the foundation for investment and long-term growth.

IPOs Begin Long Before the Market

Corporate governance is directly linked to a company’s ability to go public. Before offering shares to the market, a business must put its internal house in order: reassess loan structures, ensure accurate reporting, and put in place the systems needed to produce reliable financial statements.

Investors will conduct their due diligence either way. Their trust depends on the completeness and integrity of the picture they see. So, it is not just about the numbers — it is about the people behind them. Is the team prepared for transparency? Can it engage in strategic dialogue with the market? Is communication open, confident, and honest?

There is a common view that Uzbekistan lacks qualified managers. I would argue that is not entirely accurate. Talent exists. But the profession of independent directorship is still emerging. It needs structured development.

At the Silk Road Board and Governance Institute (SR BGI), we train future board members, offer qualifications, and support career pathways. It is an investment in long-term resilience. The talent pool is still small — but the potential is vast.

Why Many Companies Are Still Hesitant

Many business owners remain reluctant to delegate authority — particularly in family-owned enterprises. This stems from familiar vertical management models and limited trust in outside actors. Often, the founder combines the roles of owner and CEO, managing everything directly.

But as companies grow, this model becomes unsustainable. There may be heirs uninterested in daily management. The business may require professional leadership or external partners to expand. These transitions are never easy — but they are often the turning point toward more mature governance.

Here, the board plays a critical role. Its job is not to limit the founder’s vision, but to create balance and support long-term sustainability. Without that, real growth is unlikely.

At SR BGI, we work with family-owned businesses to support succession planning. In Armenia, for example, we run programmes for owners from across the CIS region, helping them develop tailored roadmaps for transferring management responsibilities. Every case is unique: some founders have already handed over control, others are preparing to do so.

The key is for change to happen deliberately — not under pressure. The ideal scenario is one where the founder steps back from day-to-day operations but remains involved in strategic decisions as a board member. That transition takes time and planning — but it’s the gateway to long-term maturity.

Hong Kong: Thinking in Centuries, Not Quarters

Some families in Hong Kong have managed their companies for 150–200 years — that is five to six generations. These businesses remain privately held and unlisted, yet they plan with a 1,000-year outlook. They have established family councils to resolve internal disputes and maintain balance between ownership and management.

They do not think in terms of quarterly earnings — they think in generations. In our region, we’re only just beginning to adopt that mindset. But the journey must start now.

Corporate governance is not bureaucracy. It is the system that gives investors confidence. Strategy, transparency, independence — these are not technicalities. They are the foundation of investment trust. And that trust is the foundation of the future.