Corporate Governance

Corporate governance is vital to the integrity of business operations and strengthens both the rule of law and democratic governance. At its core, corporate governance builds strong companies though improving relationships among investors, boards of directors, managers, and other stakeholders, but its significance extends beyond the boardroom. Weak corporate governance is linked to financial collapses, inability to attract investment, persistent corruption, privatization failures, weak property rights, and other challenges faced by countries around the world.

Improving corporate governance allows companies to obtain capital at lower cost, strengthens business strategy, clarifies accountability, enhances shareholder protection, and attracts quality employees. This is true not only for large, publicly listed companies but for other types of private and public firms. Good corporate governance is also crucial to the overall institutional health of countries because it creates demand for better public governance and prevents devastating economic failures.

CIPE assists with corporate governance reforms at every level to help improve the functioning of market economies and build democratic societies.

Corporate Governance Programs at CIPE

Through its programs and international partnerships on corporate governance, CIPE helps to:

  • Educate the private sector and governments on the importance of sound corporate governance.
  • Mobilize business associations to advocate for corporate governance standards.
  • Promote transparent markets to ensure the basis for an effective corporate governance framework.
  • Facilitate adoption of good practices by different types of companies, including familyowned firms, small and medium enterprises, and state-owned enterprises.

Enhancing Corporate Governance Education

Philippines: CIPE helped the Institute of Corporate Directors become the leader in corporate governance reforms through:

  • A scorecard system that establishes uniform standards for companies, ensuring that all publicly-listed companies use the scorecard.
  • Introducing new corporate governance training requirements for directors of banks and insurance firms.

Lebanon: The Lebanese Transparency Association launched the Institute of Directors in partnership with CIPE and the International Finance Corporation. The Institute provides:

  • Corporate governance audits and assessments, training courses, and research.
  • Guidelines, codes, and toolkits for different types of companies and institutions.

Institutionalizing Corporate Governance Standards

Pakistan: CIPE, the Pakistan Institute of Corporate Governance, and the Institute of Chartered Accountants of Pakistan launched the Corporate Governance Guide for Family-Owned Companies followed by the outreach that engaged more than 500 members of family-owned companies.

Russia: CIPE cooperated with the Russian Institute of Directors (RID) on six studies of corporate governance practices in 150 leading Russian companies. CIPE’s work with RID and the Russian Federal Commission for Securities Market led to the development of a mandatory Corporate Governance Code for all listed companies, and has encouraged state-owned and private firms to disclose their compliance.

Pakistan: With support from CIPE, draft rules for corporate governance in SOEs were approved by the Policy Board of the Securities and Exchange Commission of Pakistan. After approval by the Ministry of Law, the rules have since been fully enacted.

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