Corporate Governance in Fragile and Conflict-Affected Situations

Countries in fragile and conflict-affected situations (FCS) are much poorer, grow more slowly, and have higher population growth rates than other IDA-eligible countries— indicating a critical need to tailor assistance to FCS contexts. Corporate governance is a foundational aspect of rebuilding fractured economies. IFC’s corporate governance program in FCS and low-income IDA countries supports the development of good governance culture in these markets.

The Business Case

Today many countries face severe political instability or are struggling to emerge from years of conflict. These conflicts threaten to destroy once vibrant businesses, sending more people into poverty. Corporate governance in FCS helps companies weather the difficulties while increasing their potential to attract investment and plays an integral role in bringing about a broader shift in corporate and business culture.

IFC's Response

At a strategic level, the IFC's program in FCS helps strengthen companies by giving them the tools they need to manage through crisis, make informed decisions, take proactive steps in a situation of fragility, conflict and violence, and design business strategies to meet the challenges of economic sustainability.

At the policy-making and regulatory level, the IFC program works in partnership with World Bank to improve and maintain a sustainable dialogue between the public and private sector, improve the business environment, strengthen governmental and regulatory institutions, introduce market-level standards, increase access to finance, and mobilize domestic and international investment.

Given the complex challenges faced by companies operating in fragile markets and the unique circumstances of each of these situations, IFC’s Corporate Governance Group has developed a corporate governance operational framework to guide IFC’s activities in these markets. It is based on IFC’s widely-accepted Corporate Governance Methodology, a solutions-oriented system for evaluating the corporate governance risks and opportunities of IFC client companies.