Corporate Governance Codes and Scorecards

Corporate governance codes can encourage private sector commitment to good corporate governance and aspirations towards higher standards. They can provide guidance for financial and nonfinancial disclosure, stakeholder relations and foster better engagement of minority shareholders. They also can help clarify the roles of managers and directors.

The codes can be found in more than 140 countries worldwide, and more than 50 of them have been developed with the IFC's assistance.

Business Case

Originally, corporate governance codes were developed as complementary to laws and regulations in the area of corporate governance. Codes were established and allowed to be applied in a flexible manner so as not to constrain companies in their freedom to realize strategies and create value. This flexibility, which became known as a comply or explain regime, allowed companies to comply with the code requirements in various ways, and if not, to explain why they had not applied the particular requirement—the most common approach.

South Africa and some other countries, on the other hand, require the apply-and-explain approach, whereby companies must apply the code of corporate governance and explain how they do so—a major difference in approaches. In some countries, such as the United Kingdom and Malaysia, “stewardship codes” have been introduced, which aim to enhance the quality of engagement between asset owners, asset managers, and companies to help improve long-term risk-adjusted returns to shareholders.

As the development of corporate governance codes has matured, much time has been devoted to discussion about distinguishing what should be placed in law or regulation and what should be in codes, which have more flexible options in application. 

IFC’s Response

IFC works with regulators, stock exchanges and capital market stakeholders around the world on developing, implementing, and assessing codes and scorecards of best practices.

  • 138 new codes, laws and regulations in markets around the world enacted with IFC support.
  • 60 corporate governance codes worldwide revised since 2005.
  • 20 scorecards developed since 2008.

Selected Country Codes

Country codes developed with the IFC’s input or assistance include:

  • Africa: Kenya, Malawi, Nigeria and Senegal
  • East Asia and Pacific: Cambodia, China, Mongolia, Vietnam and Philippines
  • Latin America and the Caribbean: Brazil, Jamaica and Peru
  • Middle East and North Africa: Algeria, Bahrain, Egypt, Jordan, KSA, Lebanon, Oman, Pakistan, Palestine, Tunisia, UAE and Yemen
  • South and Southeast Asia: Bangladesh, India and Maldives
  • Southern Europe and Central Asia: Azerbaijan, Armenia, Georgia, Bulgaria, Republic of Macedonia, Montenegro, Serbia, Albania, Bosnia & Herzegovina and Ukraine

Regional and Country Examples

In Europe and Central Asia, corporate governance codes for stock exchanges developed with IFC's help are supporting greater disclosure of governance practices, increasing awareness and catalyzing improvements that yield tangible benefits for listed companies. Kazakhstan Stock Exchange launched ESG reporting guidelines with IFC’s support.

In Latin America and the Caribbean, IFC has reviewed the Jamaican corporate governance code and supported the update of the Brazilian Code of Corporate Governance, while working with the stock exchanges in Colombia and Peru.

In Africa, Nigeria's Securities and Exchange Commission developed a corporate governance scorecard and is working on updating the corporate governance code. Kenya's Capital Market Authority created a corporate governance code and scorecard with IFC's assistance. In Ghana, IFC is partnering with World Bank colleagues to support the central bank's efforts to create a governance code.

In East Asia and the Pacific, IFC has supported the development of codes and scorecards in Mongolia, the Philippines and Vietnam. Work is ongoing with regulators in Indonesia, China, Myanmar, and Cambodia.

In South Asia, IFC and the Bombay Stock Exchange jointly developed a scorecard for listed companies. Similar efforts are under way in Bangladesh, Nepal and Sri Lanka.

In the Middle East and North Africa, IFC collaborated with the Jordan Securities Commission and the Palestine Capital Market Authority. For both, IFC provided guidance on overall corporate governance concepts and on implementing corporate governance scorecards. IFC supported the development of Iraq corporate governance code.


May 2019