31 Leading Development Finance Institutions bring Corporate Governance to the Forefront of Their Mission
Press Release | 19-Oct-2007
The leaders of 31 Development Finance Institutions (DFIs) issued today a joint statement that positions corporate governance at the forefront of their sustainable development agenda in emerging markets.
This is the first initiative of this nature taken by DFIs. It highlights the increased role of good corporate governance as a facilitator of international capital flows to emerging market companies. The group of signatories recognizes that DFIs can play a critical role in promoting good corporate governance practices in emerging markets. As such, the DFIs aim to raise awareness, at both the private and public sector levels, of the importance of good governance on sustainable economic development.
Institutions that signed today the Corporate Governance statement cover most emerging markets around the world: Africa, Latin America and the Caribbean, Asia, Middle East, Eastern and Southern Europe. Together, they represent assets of almost US$1 trillion. This initiative intends to be a starting point for what is expected to become an incremental process of commitment by the DFI community and their clients. A list of participating institutions is attached.
According to the Approach Statement, each signing DFI will endeavor to:
1. Develop or adopt guidelines, policies or procedures on the role of corporate governance considerations in its due diligence and investment supervision operations; these could cover aspects such as: commitment to good corporate governance, the rights and equitable treatment of shareholders, the role of stakeholders, disclosure and transparency, and the composition and responsibilities of the Board of Directors.
2. Provide or procure training on corporate governance issues to its investment and supervision staff.
3. Encourage companies where they invest in (whether directly or indirectly) to observe local codes of corporate governance in the spirit of best international practice. Engage company management and board members in a dialogue to foster improvement in those cases where corporate governance practices are weak.
4. Promote the use of internationally-recognized financial reporting standards and encourage investee companies to adopt or align their accounting principles and practices to such standards.
5. Collaborate with other DFIs on an ongoing basis, and when appropriate with its partners, to further advance the cause of good corporate governance.
Signing the Statement on the Corporate Governance in Washington, Mr. Kaplan, BSTDB President said: "It is a very important part of our mission to promote principles and high standards of corporate governance in relations with our clients in the Black Sea region. We see it as a contribution to the formation of sound market economies and sustainable economic development."