International Finance Corporation2015-06-252015-06-252015-04https://hdl.handle.net/10986/22061Emerging markets are becoming important engines of global growth. These markets, such as the transition economies in Europe and Central Asia, are viewed with increasing interest by foreign investors as private sector participation grows, as regulatory reforms take effect, and as individual firms focus on elevating their business practices to align with international standards. In fact, foreign direct investment inflows to transition economies increased by 28 percent to reach $108 billion in 2013, according to the United Nations Conference on Trade and Development. Sound corporate governance is a critical element in helping these emerging markets meets their full economic potential. Good corporate governance, defined as the structures and processes by which companies and banks are directed and controlled, helps firms operate more efficiently, improves access to capital, mitigates risk, and safeguards against mismanagement. Good governance also facilitates appropriate consideration of other critical issues for enterprises, including environmental and social responsibility. It is the foundation for long-term business growth and sustainability, adding value for investors and contributing lasting dividends for economies. Companies and banks, particularly those in emerging markets that are focused on improving their corporate governance can look to a growing body of evidence that such efforts matter, yielding bottom line benefits, reputational enhancements, and competitive differentiation. In one study of note, the Emerging Market Investor Survey, 100 percent of the investors interviewed said they will pay a higher premium for good governance in an emerging market firm than what they would pay for a similar firm in a developed market. As companies and banks in Europe and Central Asia find their place on the world’s economic stage, efforts to enhance governance practices are helping them reduce their business risks, improve performance, and set the course for long-term success and profitability.en-USCC BY-NC-ND 3.0 IGOLIMITEDHOLDING COMPANYCOMMON SHARENONPROFIT ORGANIZATIONBOARD MEMBERSCORPORATIONLIQUIDATIONCONFLICT OF INTERESTSTOCKSHAREHOLDER RIGHTSCORPORATE GOVERNANCE INITIATIVEINSTITUTIONAL INVESTORSCORPORATE PERFORMANCELTD.STOCK MARKETCHARTERINDEPENDENT DIRECTORSREGULATORY AGENCYBOARDS OF DIRECTORSCOMPENSATION PACKAGECOMPANIESFINANCIAL STATEMENTSREGULATORY REFORMSCOMPLIANCE PLANJOINT VENTURESTAKEOVERGROUP OF SHAREHOLDERSASSOCIATIONSSINGLE SHAREHOLDERAUDIT COMMITTEECORPORATE GOVERNANCE SYSTEMSACQUISITIONSREGULATORY AUTHORITIESSTOCK COMPANYCORPORATE GOVERNANCE STANDARDSTARGET COMPANYSTATESEQUAL TREATMENTGOVERNANCE SYSTEMCEOFINANCIAL INSTITUTIONACQUISITIONPARTNERSHIPSOWNERSHIP STRUCTURESUNIONPROXYFINANCIAL INSTITUTIONSTRUSTORGANIZATIONSBOARD MEMBERFAMILY BUSINESSCOMPLIANCE OFFICERSBOARD MEETINGSHOSTILE TAKEOVERGOVERNANCE GUIDELINESSTATE-OWNED COMPANYAGENCY COSTSCHIEF FINANCIAL OFFICERCORPORATE GOVERNANCE PRINCIPLESCORPORATE GOVERNANCE CODEDIRECTORSBANKSMEMBER BOARDSHAREHOLDERS’ MEETINGSSTOCK COMPANIESMANAGERSINVESTORSCORPORATE LAWSOWNERSHIP STRUCTURESTAKEHOLDER RELATIONSHIPSCORPORATIONSSUBSIDIARIESCORPORATE GOVERNANCE REFORMSINDEPENDENT OVERSIGHTBANKCONFLICTS OF INTERESTSTAKEHOLDERSCHIEF EXECUTIVEPARTNERSHIPCORPORATE GOVERNANCE SYSTEMSHAREHOLDER VALUEASSOCIATIONCOLLECTIVEFAMILY BUSINESSESFINANCIAL PERFORMANCEMINORITY SHAREHOLDERCASH FLOW STATEMENTCOMMON SHARESCORPORATE GOVERNANCE PRINCIPLEGOVERNANCE SYSTEMSCOMPANYMINORITY SHAREHOLDERSINSIDER TRADINGINTERESTS OF MINORITY SHAREHOLDERSSUBSIDIARYPUBLIC COMPANYSHAREHOLDERSCORPORATE BOARDCONTROLLING SHAREHOLDERSMAJORITY SHAREHOLDERSTATEMUNICIPALITYCORPORATE SOCIAL RESPONSIBILITYCORPORATE BANKINGSTOCK EXCHANGEINVESTMENTORGANIZATIONCOMPLIANCE OFFICERDEBT OBLIGATIONSLEGAL ENTITYDIVIDEND PAYMENTSCORPORATE CITIZENSHIPGOOD CORPORATE GOVERNANCEINVESTOR RELATIONSSHAREHOLDER INTERESTSSHARE OPTIONSINDIVIDUALSSTAKEHOLDERINTERNATIONAL GOVERNANCE STANDARDSSHARE OPTIONGOVERNANCE PRINCIPLESCORPORATE GOVERNANCE INITIATIVESDIVIDEND POLICIESSOCIETYINDEPENDENT DIRECTORJOINT STOCK COMPANIESSHAREHOLDERPRIVATE COMPANIESSHAREHOLDER PROTECTIONSGOVERNANCE PRINCIPLESHAREHOLDER RELATIONSJOINT STOCK COMPANYCOOPERATIVECORPORATE GOVERNANCEWorking PaperInternational Finance Corporation10.1596/22061