About DFIs for Corporate Governance
The DFIs for Corporate Governance Project is joint undertaking of the Association of Development financing Institutions in Asia and the Pacific, or ADFIAP and the Center for International Private Enterprise or CIPE.
ADFIAP is the focal point of all development banks and other financial institutions engaged in the financing of sustainable development in the Asia-Pacific region. Founded in 1976, ADFIAP has currently 113 member-institutions in 42 countries. The Asian Development Bank or ADB is a Special Member of the Association. ADFIAP is also a founding member of the World Federation of Development Financing Institutions or WFDFI composed of regional associations in Africa, Asia-Pacific, Latin America and the Middle East. ADFIAP is an NGO in consultative status with the United Nations’ Economic and Social Council. The permanent Secretariat of ADFIAP is based in Makati City, Metro Manila, Philippines.
CIPE is a non-profit affiliate of the U.S. Chamber of Commerce and one of the four core institutes of the National Endowment for Democracy. CIPE has supported more than 920 local initiatives in 105 developing countries, involving the private sector in policy advocacy and institutional reform, improving governance, and building understanding of market-based democratic systems. CIPE programs are also supported through the United States Agency for International Development.
Follow this link to know more about DFIs for Corporate Governance: https://www.governance-asia.com
Corporate Governance and Development Finance Institutions In Asia and the Pacific
The Asian financial crisis placed a new emphasis on corporate governance in Asia and the Pacific. At the center of the crisis were companies and conglomerates, owned and controlled by generations of families and interlocking interests, which were brought up in a relationship-based (rather than market-driven) environment. As promoters of economic growth, development finance institutions (DFIs) in the region took a central role in advocating corporate governance reforms, but DFIs cannot succeed in promoting good corporate governance within the Asian business community until they establish effective governance mechanisms within their own structures.
Download here: Corporate Governance and Development Finance Institutions In Asia and the Pacific
How does corporate governance affect development?
The Center for International Private Enterprise (CIPE), www.cipe.org, believes that the practice of good corporate governance in companies generates positive effect in their operations. Below are some points to digest on how does corporate governance affect development from CIPE:
• Increased access to external financing by firms, which can lead to greater investment, higher growth, and more employment creation.
• Lower cost of capital and associated higher firm valuation, which makes more investments attractive to investors and leads growth and employment.
• Better operational performance, through better allocation of resources and better management, which creates wealth.
• Reduced risk of financial crises, a particularly important effect, as financial crises can impose large economic and social costs.
• Better relationships with all stakeholders, which helps improve social and labor relationships and areas such as environmental protection.
Combating bribery
Enterprises should not, directly or indirectly, offer, promise, give, or demand a bribe or other undue advantage to obtain or retain business or other improper advantage. Nor should enterprises be solicited or expected to render a bribe or other undue advantage. In particular, enterprises should:
1. Not offer, nor give in to demands, to pay public officials of the employees of business partners any portion of a contract payment. They should not use subcontracts, purchase orders or consulting agreements as a means of channeling payments to public officials, to employees of business partners or to their relatives or business associates.
2. Ensure that remuneration of agents is appropriate and for legitimate services only.
3. Enhance the transparency of their activities in the fight against bribery and extortion. Measures could include making public commitments against bribery and extortion and disclosing the management systems the company has adopted in order to honor these commitments.
4. Promote employee awareness of and compliance with company policies against bribery and extortion through appropriate dissemination of these policies and through training programmes and disciplinary procedures.
5. Adopt management control systems that discourage bribery and corrupt practices, and adopt financial and tax accounting and auditing practices that prevent the establishment of “off the books” or secret accounts of the creation of documents which do not properly and fairly record the transactions to which they relate.
6. Not make illegal contributions to candidates for public office or to political parties or to other political organizations. Contributions should fully comply with public disclosure requirements and should be reported to senior management.
Source: www.oecd.org