The Corporate Governance Development Framework — adopted by 35 Development Finance Institutions (DFIs) as of December 2017 — is a common approach towards addressing the corporate governance risks and opportunities in DFI investment operations.
The EBRD is a founding member of the initiative which started in October 2007, when 31 DFIs signed an "Approach Statement" to place corporate governance at the forefront of the sustainable development agenda of DFIs.
After the signing of the Statement, a Working Group – set up with representatives of major DFIs, including the EBRD — developed the DFI Toolkit on Corporate Governance. This set of tools aim to provide a common methodology for assessing corporate governance in the investment work of DFIs.
The DFI Toolkit on Corporate Governance includes the following templates:
- Corporate Governance Questionnaire
- Corporate Governance Progression Matrix
- Corporate Governance Instruction Sheet
- List of Key Corporate Governance Terms
- Sample - Corporate Governance Improvement Program
- Sample - Corporate Governance Section in Internal Approval Documents
In September 2011, the EBRD and 29 other DFIs signed the Corporate Governance Development Framework, which endorses the toolkit as a common platform for evaluating and enhancing governance practices in their investee companies.
The signatory institutions cover emerging markets around the world, including Africa, Latin America, the Caribbean, Asia, Middle East, North Africa, Europe and Central Asia, and represent total assets of more than US$ 850 billion. Through the Corporate Governance Development Framework, the signatories answered the G-20’s call for DFIs to strengthen their coordination and ensure the achievement of certain key institutional reforms, such as an increased commitment to transparency, accountability, and good corporate governance.
As providers of financing to companies in some of the world’s most challenging economies, DFIs can be leaders in promoting good corporate governance practices. The Corporate Governance Development Framework helps signatory institutions evaluate the corporate governance risks and opportunities of the companies in which they invest.
The signatories aim to raise awareness, both at the private and public sector levels, of the importance of good governance to sustainable economic development. Signatories are expected to implement the Framework at their own pace and at a level that suits their institutions. They also work together to advance the business case for good corporate governance.
In particular, each institution that adopted the Framework has undertaken to:
- Integrate corporate governance in its investment operations by adopting procedures and tools in line with the Framework, conduct corporate governance assessments of its investment clients, and develop action plans when appropriate.
- Identify staff responsible for implementation and oversight of the Framework.
- Provide or procure training to ensure capacity-building and knowledge sharing on corporate governance.
- Collaborate with other signatories to share experiences and resources on training and implementation.
- Report annually on the implementation of the Framework.
The DFI Corporate Governance Working Group is responsible for development of the Framework.
Since the signing, signatories have been gathering annually to discuss current corporate governance developments, share experiences and pave the way forward.
The EBRD has incorporated the Corporate Governance Development Framework in its own operational procedures.