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Corporate Governance

Corporate Governance > Regional Advisory Programs  > Latin America and the Caribbean 
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Davit Karapetyan
Corporate Governance Lead

Tel: +1 202-458-9517

Oliver Orton
Program Manager

Tel: + 57-1-319-2360 

Corporate Governance: Latin America and the Caribbean


The Latin America and Caribbean region is still enduring acute economic challenges.  The economic crisis, although not as severe as in other regions, brought a slow-down to more than 5 years of economic growth in the region – averaging 5% per year – fueled in part by the adoption of responsible macro and fiscal policies, and in part by the boom in commodity prices. Poverty rates have fallen, albeit modestly. At present about 8% of the population, or 47 million people, live in extreme poverty. There has also been some decline in average inequality in the region, but progress is slow.


Going forward, the challenge for the region is to sustain growth and continue to reduce poverty and inequality in a much less favorable global environment.


Implementing good corporate governance practices are key to attain sustainable growth as they support the creation of businesses, which can better raise investment and have improved access to markets. This is supported by strengthening the corporate governance legislative framework, the building of institutional capacity, and greater awareness of the benefits of good corporate governance practices.


IFC has worked on corporate governance projects for more than 14 years and maintains a unique ability to contribute to better corporate governance practices in the private sector, and in support of private sector development generally by working with both, private enterprise as well as governmental and regulatory authorities.




The overall goals of the Corporate Governance Program in Latin America and the Caribbean are to improve firm performance (improved decision-making, risk management, operating efficiency, profit, and valuations) and increase access to finance (reduced costs of capital, improved loan terms, and increased access to investors) by promoting better corporate governance practices among companies in the region.


Broadly, the objectives of the Program to attain this goal over four years are to:


Firm-Level:  Improve corporate governance practices in companies through training and assessments; plus advance board diversity. 


Market-Level:  Help strengthen the market infrastructure for corporate governance by building capacity of institutes and market intermediaries (e.g., media, consultants, mediators, investors) in selected countries so they can advance the corporate governance agenda on an ongoing basis.


Regulatory-Level:  Help develop the regulatory environment (e.g., laws, codes, listing rules) and build the capacity of selected regional regulators with tools and training (e.g., central banks, capital market authorities).


Macro-Level Raise awareness of the benefits of good corporate governance practices across the region by developing publications and participating in selected awareness raising events and initiatives.



Progress Thus Far


IFC and its Global Corporate Governance Forum have already achieved considerable advances in some areas. The Spanish-language version of the Forum’s website is popular, and since 2005 IFC has been active supporter of the Latin American Companies Circle promoting awareness of good corporate governance. The activities of the Latin American Companies Circle, including its influential publications, contribute to the development of good corporate governance practices at the firm level, with advice coming directly from Latin American companies.


IFC also supported the creation of a regional center of excellence on the basis of the Brazilian Corporate Governance Institute (IBGC). IFC has helped IBGC with its intra-regional work and the network of institutes (IGCLA) to serve as a platform to replicate the know-how Brazil has achieved. IFC has also conducted Board Leadership training of trainers in a number of countries in the region.


Policy work in the region is currently undertaken on a regional basis through the involvement and support of the Latin American Corporate Governance Roundtable. IFC has also provided advice for the development of corporate legislation in several countries (e.g., Brazil and the Novo Mercado) and voluntary codes of best practice.


IFC hopes to leverage this past progress and ramp-up activities to increase support to corporate governance activities across the region.  While corporate governance alone cannot address the macro-economic issues above, it certainly has a role to play.  This includes helping improve investor confidence in companies and helping companies put in place sound structures to minimize risk and maximize performance. To do this, the program will undertake activities at various levels (firm, institution, market, and macro).



Why is this important to the Latin America and Caribbean Region?


The region needs to build on the progress made so far while still enduring acute economic challenges at different levels:


  • At the firm-level, there is a lack of penetration in particular countries and market segments.
  • At the market-level, there is a need to build and deepen capacity of many regional institutions and intermediaries
  • At the regulatory-level, there is a need to strengthen regulatory frameworks and capacity of regulators
  • At the macro-level, there is a need for heightened awareness and better understanding of the benefits of good corporate governance practices.





Practical Guide to Corporate Governance: Experiences from the Latin American Companies Circle
The publication details firms recognized for better corporate governance practices that had suffered less damage than average listed Latin American companies during the financial crisis.


Achieving Effective Boards - A Comparative Study of Corporate Governance Frameworks and Board Practices in Argentina, Brazil, Chile, Colombia, Mexico, Panama and Peru
The publication surveys the corporate governance landscape and sets out recommendations from the Latin American Corporate Governance Institutes network across eight key issues relevant to board effectiveness.


Mesa Redonda Latinoamericana de Gobierno Corporativo: Capitalizando Sobre Una Década de Progreso 
Con ocasión del décimo aniversario de la creación de la Mesa Redonda, el presente documento evalúa los logros de la reunión más importante de la región en gobierno corporativo.


Guía Práctica de Gobierno Corporativo: Experiencias del Círculo de Compañías de América Latina
La publicación muestra como compañías reconocidas por sus buenas prácticas de gobierno corporativo sufrieron menos daño que otras en América Latina durante la reciente crisis financiera.


Herramienta 2: Elaboración de Códigos de las Mejores Prácticas para el Gobierno Corporativo
Los códigos de gobierno corporativo son herramientas esenciales para mejorar las prácticas relacionadas con la dirección de empresas a nivel nacional. Su función principal consiste en elevar el nivel de las normas y promover iniciativas de reforma.


Herramienta 1: Creación de Organizaciones de Capacitación de Directores
El funcionamiento adecuado del directorio es clave para el desempeño de las empresas y su capacidad para atraer capitales, de la misma manera que un acertado gobierno corporativo es fundamental para que el directorio sea eficaz.


Novo Mercado and Its Followers: Case Studies in Corporate Governance Reform
Focus 5, by Maria Helena Santana, Melsa Ararat, Petra Alexandru, and B. Burcin Yurtoglu, February 2008.



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