Corporate governance activities

In 2005, the Bank adopted a comprehensive Corporate Governance (CG) strategy which serves as a framework and facilitates interventions in this area. The goal of the Bank’s strategy is to contribute to economic development by promoting good CG in public and private sector corporations and ensure that they create value for shareholders and the other stakeholders, not only from a financial standpoint, but also in a socially and environmentally responsible way. A good CG is also of direct concern to the Bank as an equity investor in private sector ventures and a financier of development projects, which often rely on the involvement of private sector corporations and State-owned Enterprises (SOEs). The successful outcomes of such investments and projects clearly rely on a sound corporate governance environment.  

Since adopting its strategy, the Bank has been engaged in a number of activities aimed at laying the foundations for sustainable initiatives that will contribute to anchor best corporate governance practices in development programs at country, regional and corporate levels. The Bank has also taken steps to identify ways to strengthen its internal institutional framework in order to better carry out its leadership role of promoting CG in Africa. Within this context, the Bank has organized a series of meetings and events with the aim of improving coordination among the actors involved in promoting CG, increasing knowledge transfer and dissemination in areas relating to CG among partners, and developing effective interventions to tackle CG challenges based on best practices and lessons learnt.

Past initiatives include:

• hosting an annual consultative meeting of key development partners and selected stakeholders involved in the area of CG with a view to exchanging information and better coordinating activities in the field (2005-2006-2007);
• continuous support to NEPAD and the African Peer Review Mechanism Secretariat, NEPAD Countries, Professional Bodies and Pan-African institutions such as the Pan-African Consultative Corporate Governance Forum;
• organization of a workshop during the Bank’s Annual Meetings of Shanghai;
• and active participation in the preparation and adoption of the common DFIs position on CG. The declaration was signed by 31 DFIs (including the Bank)  on the occasion of the World Bank Group Annual Meeting of October 2007.

Country Governance Profile

One of the most important aspects of improving governance practice is the ability to assess performance. The Bank Group’s Country Governance Profile (CGP) was introduced in 2002 as a diagnostic tool to assess governance features, trends and performance in Regional Member Countries (RMCs). The Bank’s CGP was designed to serve several purposes: (i) inform Bank policy dialogue, country strategies and operational programming;  (ii) serve as an instrument for mutual accountability by regularly monitoring the performance and progress of regional member countries regarding governance, and (iii) increase Africa’s voice and footprint in governance analysis.

Between 2002 and 2006, the Bank undertook 21 CGPs. In 2006, the Bank commissioned an internal review to assess the effectiveness of the CGP, both in terms of product and process.  The review suggests that experience has been mixed. The Bank’s Review of Country Governance Profiles recommends the following to enhance the quality, relevance, timeliness and effectiveness of CGPs: align them to country processes, in particular the APRM, and more effectively contribute to donor harmonization in governance diagnostic work in line with commitments under the 2005 Paris Declaration on Aid Effectiveness (performance targets 10a and 10b). Ultimately, the CGPs should inform and support reform efforts by RMCs and provide the Bank, the RMCs and their stakeholders a mutual accountability instrument to monitor progress on an impartial, consistent and regular basis (Paris Declaration performance target 12).

A revision process is currently underway and the new CGP framework is expected to be presented in early 2009.