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Washington, D.C., November 8, 2007
— According to a publication released today by the IFC Global Corporate Governance Forum, developing mediation to resolve board disputes is a critical component of good corporate governance practices. Mediation will help companies resolve conflicts that can undermine their performance, divert resources, and paralyze decision making.
The publication,
Mediating Corporate Governance Conflicts and Disputes
, outlines how mediation can help settle corporate governance-related disputes in ways that are far less costly and quicker to resolve than litigation. It is available online at
www.gcgf.org
.
“Board disputes must be resolved efficiently. Mediation and other alternative dispute resolution mechanisms are a way of doing so,” said Mervyn E. King, a member of the forum’s Private Sector Advisory Group and leading corporate governance expert. “It is vital that such mechanisms exist to help resolve disputes in a timeframe that businesses can live with.”
“Consensus-based alternatives to adjudication can contribute to improving corporate governance practices, strengthening investor confidence, supporting business continuity, and reducing the costs resulting from disputes,” write the authors, Eric M. Runesson, a partner at Sandart & Partners, and Marie-Laurence Guy, task team leader for the IFC Global Corporate Governance Forum.
The publication reviews corporate governance conflicts and considers the main characteristics, benefits, and obstacles of mediation. It also makes recommendations for introducing mediation into companies’ practices.
“By focusing on interests as opposed to positions, by looking at the future rather than the past, and by promoting open discussion, mediation gives companies a management tool that can greatly improve the quality of board meetings,” the authors said.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In fiscal year 2007, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.
IFC Global Corporate Governance Forum
The Global Corporate Governance Forum is an IFC multidonor trust fund facility, which was cofounded by the World Bank and the Organisation for Economic Co-operation and Development in 1999. Through its activities, the forum aims to promote the private sector as an engine of growth, reduce the vulnerability of developing and transition economies to financial crisis, and provide incentives for corporations to invest and perform efficiently in a socially responsible manner. It sponsors regional and local initiatives that address the corporate governance weaknesses of middle- and low-income countries in the context of broader national or regional economic reform programs. Its donors include IFC and the governments of Canada, France, Luxembourg, the Netherlands, Norway, Sweden, and Switzerland. For more information, visit
www.gcgf.org
.
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