IFC, together with the Karachi Center for Dispute Resolution (KCDR), organized a training seminar on 14 November 2008 to help certified mediators from the Center acquire new skills to resolve corporate governance disputes involving family businesses. The seminar brought together experts in corporate governance to provide mediators with new tools on how to resolve corporate governance disputes resulting from flawed governance practices. Most of these disputes happen in family-owned companies, which make up about 70 percent of the market in Pakistan.
“Research shows that most family businesses are at risk because of disputes in their third generation,” said Khawar Ansari, manager for IFC’s Pakistan Corporate Governance project. “We believe that if mediators have a clear understanding of the rights of shareholders in a company, they will play a vital role to help companies resolve disputes between owners and other key stakeholders.”
Small and medium enterprises, including family businesses, routinely deal with litigation that can take over 10 years to resolve. The enormous backlog means that cases can cost a company around 35 percent of its assets and pose a threat of insolvency.
Commenting on the usefulness of the training, Umaimah Anwar Khan, a corporate lawyer and certified mediator, said: “Litigation presents many challenges for protection of shareholders rights. It is lengthy and expensive. The training provided an opportunity to learn ideas and exchange views on the potential of mediation in settling such disputes out of court.”
IFC’s Pakistan Corporate Governance project aims to improve governance practices in Pakistani banks and companies. As part of the project, IFC is working closely with the Pakistan Institute of Corporate Governance and private-sector companies. Pakistan, like other frontier markets, needs greater private sector development to create jobs, raise living standards, and reduce poverty. IFC provides advisory services in the country to remove obstacles to the growth of smaller businesses.
For further information, please contact:
Navin Merchant, manager, Alternative Dispute Resolution program
NMerchant@ifc.org
Khawar S. Ansari, manager, Pakistan Corporate Governance project
KAnsari@ifc.org
To learn more about IFC's advisory services programs in the region:
Alternative Dispute Resolution
Corporate Governance
IFC Organizes Seminar to Help Resolve Disputes Among Family Businesses in Pakistan