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Global Corporate Governance Forum

Global Corporate Governance Forum > Frequently Asked Questions 

Frequently Asked Questions

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  • Sir Adrian Cadbury provided a good definition of corporate governance in the Cadbury Report issued in 1992:

    "Corporate governance is the system by which companies are directed and controlled... Boards of directors are responsible for the governance of their companies. The shareholders' role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place.

    "The responsibilities of the board include setting the company's strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board's actions are subject to laws, regulations and the shareholders in general meeting."

    For an effective relationship to be maintained between the providers of capital and company managers, high levels of trust must exist between those two groups. Thus, four overarching corporate governance principles need to be in place:

    • Transparency: Directors must make clear to the providers of capital and other key stakeholders why every material decision has been made.
    • Accountability: Directors should be held accountable for their decisions and account to key shareholders, submitting themselves to appropriate scrutiny.
    • Fairness: All shareholders should receive equal consideration by the directors and management with a sense of justice and avoidance of bias or vested interests.
    • Responsibility: Directors should carry out their duties with honesty, probity, and integrity.
  • Corporate governance provides the structure for shareholders to define, implement and monitor a company's goals and objectives, while the management is responsible for delivering on those goals and objectives. To put it in very simple terms, the board of directors makes policy, and management carries it out.

    Board responsibilities, according to OECD Principles of Corporate Governance, include:

    • Develop the company's purpose, vision, values
    • Guide strategy
    • Oversee management
    • Nominate key executives
    • Align remuneration of board and key executives with long-term interests of the company
    • Ensure that properly supervised controls are in place
    • Oversee disclosure and communications
    The senior management team, by contrast, holds specific executive powers of managing the day-to-day business of the company and is accountable to the board for the proper fulfillment of its designated functions, tasks and strategic and operational objectives.

    The highest levels of senior management (typically, the chief executive officer) may also sit on the board of directors, in which case, they are referred to as "executive directors."
  • Well-governed companies enjoy greater access to capital and lower capital costs, and they provide higher long-term return on investment for their shareholders. A March 2009 study by Governance Metrics International (GMI) concluded that well-governed companies are faring better in the current economic downturn. Out of a sample of 4,200 companies rated by GMI, only 90 companies exhibited consistently high corporate governance standards over 12 quarterly rating cycles, and these 90 companies outperformed their market capitalization peers by 23 percent in shareholder returns!

    According to two recent studies, poorly-governed companies in Brazil could increase their market capitalization by 85 – 100 percent with a shift to good governance. Another study suggests that well-governed firms in Korea traded 160 percent higher than poorly governed firms.

    For more on company-specific benefits, as well as "how to" advice on implementing good corporate governance practices, read Practical Guide to Corporate Governance: Experiences from the Latin American Companies Circle.

    Good corporate governance also benefits the broader economy. For example, it fosters:

    • More bank lending as a result of greater transparency and financial strength
    • Greater financial sector stability
    • Faster corporate sector growth and job creation
    • Better protection for all investors, including pension beneficiaries

    Good corporate governance practices lead to better companies and, in turn, better societies. For more information, review Focus 1: Corporate Governance and Development and The Irresistible Case for Corporate Governance.

  • The Global Corporate Governance Forum was founded in 1999 by the World Bank and the Organisation for Economic Co-operation and Development (OECD) following the financial crises in Asia and Russia in the latter part of the 1990s. It was established to promote initiatives to raise corporate governance standards and practices in developing countries and emerging markets, using the OECD Principles of Corporate Governance as the basis for its work.

    The Forum's work program was launched in 2002 in Monterrey, Mexico, at the Financing for Development meetings organized by the United Nations. Learn more about Forum's history.
  • No, the Forum is part of the IFC Corporate Governance Group, located in the Environment, Social and Governance Department. It is funded by multiple donor governments and international organizations.
  • The Forum promotes global, regional, and local initiatives that improve corporate governance policies, standards, and practices in emerging markets and developing countries. Most of our work falls into the following categories:

    The Forum delivers technical assistance and training programs in partnership with IFC regional and country advisory services programs, and a network of regional and country affiliates.

    In the course of the Forum's Phase III 5-year program of work, which commenced on July 1, 2010, some of the affiliates will receive technical assistance to become corporate governance centers. They will facilitate the Forum's capacity to address demand for its assistance within their respective regions. They will distribute and apply the Forum's knowledge products locally and regionally, while providing a basis for South-South collaboration between institutions in emerging markets and developing countries.

  • The Forum provides direct technical assistance to:

    • Capacity building and advocacy organizations, such as Institutes of Directors and Corporate Governance Associations
    • Government institutions, policy makers, regulatory oversight authorities, stock exchanges, etc
    • Academic institutions, and business media
    We do not provide direct support to individual companies. For such assistance, please contact our regional affiliates or IFC Advisory Services.
  • To multiply its development impact, the Forum focuses on training the trainers, who then use the Forum's materials to deliver training programs to individual board directors in their own countries. We generally work with trainers who already have substantial experience in the field of corporate governance, and/or have been referred to us by our partner regional training institutions. Please contact our regional affiliates if you are interested to participate.

    One exception is the Media Program, in which we directly train individual journalists. In the near future, however, this work will be directed via our regional partners and affiliates.
  • In delivering its technical assistance and capacity building projects, the Forum fully finances international experts as well as the production and distribution of related materials, but we generally expect our partners and trainees to cover their own costs.
  • The Forum is part of the IFC Corporate Governance Group that includes IFC Corporate Governance Advisory Services. The Forum focuses more on knowledge products and on building global expertise. Because IFC Advisory Services have a strong presence in the regions and in client countries, the Forum delivers most of its country-specific and regional activities in partnership with local offices of IFC Advisory Services.

    One critical distinction: Unlike the Forum, IFC Advisory Services can provide firm-level support.
  • Although the Forum does not fund full-fledged research, it does support specific-research working papers relevant to the projects it undertakes. Learn more about our Emerging Markets Corporate Governance Research Network.
  • The Private Sector Advisory Group (PSAG) comprises some 60 international and regional leaders, who volunteer their time and expertise to advance corporate governance in emerging markets and developing countries. Drawn from all regions, PSAG members include corporate board members, senior executives, investors, lawyers, accountants, and financial journalists.

    PSAG members work on a very diverse set of issues. Their stature and considerable practical experience helps to mobilize support among private sector leaders worldwide to influence senior regulators and government officials. They work closely with the Forum in guiding the development and utilization of the best international standards and practices. Code-drafting committees benefit from PSAG members' comments and recommendations. PSAG members provide input into the work of stock exchanges, regulatory agencies, director training organizations, and business associations.

    Download the PSAG brochure to learn more. 

    Candidates for PSAG are nominated by the existing members.

  • The Forum's work is divided into the following thematic areas: Board Leadership Training, Codes and Scorecards, Media Training, Resolving Corporate Governance Disputes, and Research Network. Please visit the relevant program's page and contact the program manager directly. E-mail addresses are at the bottom of each program page. Learn more about the expertise of our staff and the PSAG members.

    Not sure whom to contact? Please use the general e-mail, and we will direct your inquiry.
  • Yes, occasionally. All employment and internship opportunities are posted on the homepage, and advertised in our regular e-mail newsletter. To subscribe, please contact us at
  • Yes, our publications and toolkits can be freely downloaded on our website. One exception is the Board Leadership Training Resources, which we make fully available only to people who have been through our training-of-trainers program. This is done in order to promote careful adaptation of the material to local circumstances and engage the trainers in the Forum's development work.

    On a case by case basis, we can also mail printed copies of our publications free of charge to organizations in developing countries and emerging market economies. Otherwise we encourage you to download the material from our website as this saves the Forum considerable costs from its limited funding.
  • To subscribe to our regular newsletter (e-mail updates are sent out every six weeks or so), please send a request to
  • When you need to reference the Forum, we encourage you to use the Forum's logo, name, and the following description:

    "The Global Corporate Governance Forum is the leading knowledge and capacity-building platform dedicated to corporate governance reform in emerging markets and developing countries. The Forum offers a unique collection of expertise, experiences, and solutions to key corporate governance issues from developed and developing countries.

    The Forum's mandate is to promote the private sector as an engine of growth, reduce the vulnerability of developing and emerging markets to financial crisis, and provide incentives for corporations to invest and perform efficiently in a transparent, sustainable, and socially responsible manner. In doing so, the Forum partners with international, regional, and local institutions, drawing on its network of global private sector leaders.

    The Forum is a multi-donor trust fund facility located within IFC, co-founded in 1999 by the World Bank and the Organisation for Economic Co-operation and Development (OECD)."

    We would also appreciate being notified when you plan to reference the Forum

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