"Countries seeking to create a capital market (and companies seeking to attract local or global capital) must develop a framework that assures investors of two things: first, the assets they provide will be protected, and, second, disputes related to the company’s governance can be addressed effectively." Christian Strenger, PSAG Deputy Chairman, Member of the German Corporate Governance Commission, Director, DWS Investment GmbH.
Most companies experience corporate governance conflicts or disputes, although they are less common for well-governed companies. These conflicts and disputes frequently involve the company’s shareholders, board directors, and senior executives. Resorting to the judicial system may leave the dispute unresolved for several years, which can paralyze the board, harm the company’s performance, and deter investors. This is why it is essential for a company to implement effective dispute resolution processes, if the company is to succeed over the long term. Efficient dispute resolution is part of good risk management.
To help companies manage and resolve corporate governance disputes more effectively, the Forum has actively promoted the use of ADR (alternative dispute resolution) processes and techniques since 2007, in cooperation with IFC field-based Advisory Services. This support for ADR has included capacity building projects and workshops in Bosnia and Herzegovina, Pakistan, Ukraine, France, and the United States.
The Forum has developed an innovative toolkit, Resolving Corporate Governance Disputes, to show directors how to prevent and efficiently resolve corporate governance disputes by drawing on consensus-based alternatives to court adjudication.
Toolkit: Resolving Corporate Governance Disputes
The new toolkit builds on the research in the Focus publication, Mediating Corporate Governance Conflicts and Disputes, written by Eric M. Runesson and Marie-Laurence Guy. The toolkit breaks down the common types of governance disputes and provides techniques for effective resolution. It also offers practical suggestions and training resources for institutions that are helping companies implement good corporate governance practices or seeking ways to manage and prevent disputes in a company’s best interest. These institutions include institutes of directors, corporate governance centers, corporate law firms, corporate governance consulting firms, mediation and arbitration centers, universities, and research centers. Download the toolkit.