Good corporate governance guidelines were developed in the 1990s and 2000s by international institutions and governments, but primarily by companies themselves as economic stakeholders gradually realised that organisation and balanced powers, transparency and management accountability were all key factors for securing a company’s long-term future and adding value.
These principles, which were given theoretical form by the OECD, have been taken on board in all economies in developing and emerging countries alike. Indeed governance plays an essential role in economic development and sustainable business growth and, as you will discover in this issue, there is a direct correlation between good governance practices, financial performance and enhanced corporate social responsibility.
The benefits of good governance are legion. For example, it is an excellent means of limiting financial risk for both investors and lenders. It establishes a climate of trust as regards the management and control of the company’s activities. Lastly, these best practices constitute a universally recognised corpus of rules and behaviour that make it much easier for those companies that apply them to become integrated within the global economic ecosystem.
So it is only natural that an institution like Proparco would want to use its magazine to focus on this issue. This provides an opportunity to analyse the risks in the event of a failure of corporate governance but also to highlight best practices, raise reader awareness, give a platform to entrepreneurs themselves and provide all economic stakeholders with a few pointers for the future.
Governance has now become an integral part of Proparco’s customer support strategy and four years ago we set up a dedicated hub of expertise. As part of our business support team, this hub is tasked with providing Proparco clients with practical help in deploying good governance processes and this has undoubtedly become one of our key non-financial sources of value added.