Tbilisi, Georgia, July 7, 2009
—IFC, a member of the World Bank Group, has conducted a survey of corporate governance practices in Georgian banks that shows these banks follow better corporate governance practices than other Georgian companies but with further improvements could enhance their access to external financing, among other benefits.
The IFC survey identified key areas of corporate governance in need of further development at Georgian banks, such as segregation of the functions of the supervisory and management boards, the role of the independent director, transparency, and shareholders’ rights. The survey will also provide bankers, investors, and other interested parties with a tool for self-assessment and cross-comparison regarding corporate governance practices, thereby enabling them to identify their main weaknesses and develop a targeted set of initiatives for improvements.
In connection with the survey, IFC Georgia also published the first-ever Georgian-language version of a Basel Committee document on raising corporate governance standards at banks. The document outlines international best practices and should help raise the corporate governance standards of Georgian banks, and facilitate their access to external financing, as well as help local banks improve decision making, credibility, and reputation.
“The fact that Georgian banks are paying so much attention to corporate governance is quite promising,” said Levan Gotua, Head of the Georgian Financial Supervisory Agency. “However, there is still more to be done, and IFC will be of great assistance to our banks in this regard.”
“We hope the survey and its recommendations will help all stakeholders, including regulatory authorities, adjust their efforts to improve corporate governance practices,” said Maia Tevzadze, Project Manager for the IFC Georgia’s Corporate Governance Project. “We will continue our work with banks through seminars, workshops, and consultations, as well as focus our attention on the regulatory framework for corporate governance.”
The IFC Georgia Corporate Governance Project is supported with funds from BP and its oil and gas co-venturers and the Canadian International Development Agency.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit
www.ifc.org
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