Strengthening Corporate Governance
We invest time, effort and resources in corporate governance because the dividends are clear.
Over time, good governance practices make companies stronger, more efficient, transparent, accountable and sustainable—the kind of companies, in other words, that can make a real impact on development.IDB Invest supports efforts and participates on policy discussions throughout Latin America and the Caribbean to enact robust systems for corporate governance.
- Improve their operational performance through clearer separation of ownership and management, better decision-making processes, more effective succession planning, stronger internal controls and risk management, as well as increased transparency.
- Are more likely to attract funding on the international and local markets and receive higher market valuations, as they are generally more reputable.
- Tend to act more strategically, allocating and managing resources more sustainably and developing better relationships with stakeholders.
IDB Invest supports efforts to establish robust systems for corporate governance and participates in policy discussions on this issue throughout Latin America and the Caribbean.
IDB Invest’s corporate governance strategy and assessment methodology is based in the Corporate Governance Development Framework (CGDF). The CGDF is a common platform for evaluating and enhancing governance practices among development finance institutions. It has been adopted by 35 signatories covering the world's emerging markets, including Africa, Latin America and the Caribbean, Asia, the Middle East and Eastern and Central Europe, representing assets of more than $850 billion altogether.
The CGDF is the result of the extensive collaboration among members of the DFI Corporate Governance Working Group which consists of representatives of Asian Development Bank (ADB), Black Sea Trade & Development Bank (BSTDB), CAF Development Bank of Latin America (CAF), CDC Group plc (CDC), Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG), Dutch Development Bank (FMO), International Finance Corporation (IFC), IDB Invest and Proparco.
Each signatory of the CGDF has undertaken to:
1. Integrate Corporate Governance (“CG”) in its investment operations
a) Adopt CG procedures and tools in line with the Framework’smethodology;
b) Where considered appropriate, conduct CG assessments of investee companies and develop CG action plans;
c) Monitor progress of the implementation of CG action plans.
2. Ensure internal responsibility
a) Identify and assign an internal function that is responsible for the implementation of the Framework.
3. Provide or procure training
a) Ensure capacity building and knowledge transfer to staff for the implementation and further development of the Framework.
4. Collaborate with other signatories
a) Share experience and resources in training and implementation;
b) Contribute to developing case studies and progress reports on the above.
5. Report on implementation
a) Report annually to the other signatories on the internal implementation of the Framework.
The CGDF common methodology tools are available here
The CGDF holds an annual DFI Corporate Governance Conference, to introduce new corporate governance trends, developments and build bridges with the investment and governance communities. The conference is hosted by a DFI member and usually has two days, the first opened to the general public and the second open to signatory to signatory institutions of the CGDF and will focus on the CGDF implementation process. The format of the conference is meant to be very interactive: guest speakers introduce topics for discussion and there is plenty of space for questions and interventions by participants. We share experiences and challenges faced in our work, follow-up on the progress achieved to date and identify priorities for the year to come.
In 2019, the Conference will be held at the headquarters of the International Finance Corporation (IFC) in Washington DC on March 27-28, 2019. We invite you to use this link to register your attendance to either or both days.
At IDB Invest, we provide local training and activities—including our Sustainability Week—to address environment, social and corporate governance issues. Last year’s event took place May 10-11 2018 in Lima, Peru. Visit the event page here.
These activities help lay a foundation for corporate governance and raise awareness in the region. The ongoing global dialogue and collaboration also enhance our own expertise and enrich the extensive work we do with our clients.