Defining Corporate Governance
Corporate governance refers to the structures and processes for the direction and control of companies. It concerns relationships among the management, board of directors, controlling shareholders, minority shareholders and other stakeholders. Good corporate governance contributes to sustainable economic development by enhancing the performance of companies and increasing their access to outside capital.
Corporate Governance activities at the World Bank
The corporate governance activities of the World Bank focus on the rights and equitable treatment of shareholders, the treatment of stakeholders, disclosure and transparency, and the duties of board members.
Standardized assessments
The World Bank helps client countries assess their corporate governance institutional frameworks and practices by preparing country corporate governance assessments using the Organization for Economic Co-operation and Development's (OECD) Principles of Corporate Governance (
494KB) as a benchmark.
These assessments have been carried out under the auspices of the joint World Bank-International Monetary Fund initiatives on the Financial Sector Assessment Program and the Reports on the Observance of Standards and Codes.
The corporate governance assessments underpin policy reform dialogue between governments and the World Bank and the International Monetary Fund.
Advocacy and capacity-building
The Bank has launched the Global Corporate Governance Forum, a multi-donor trust fund to disseminate best practice, foster academic research and provide co-financing for follow-up operations to diagnostic work.
The Bank has also partnered with the OECD to organize Regional Roundtables on corporate governance to disseminate best practice and increase the ownership of reform in developing countries and transition economies.
