New York City, September 8, 2009—A
new publication supported by IFC, a member of the World Bank Group, highlights
the challenges, priorities, and tangible benefits of adopting leading corporate
governance practices in Latin America.
The Practical Guide to Corporate Governance: Experiences from the Latin
American Companies Circle, was developed by the Latin American Companies
Circle with the support of IFC, the Organization for Economic Co-operation
and Development, and the IFC Global Corporate Governance Forum. It compares
the performance of Companies Circle’s members to other listed companies
in areas such as return on equity and stock multiples, showing that firms
with superior corporate governance practices fared better than others.
The guide also analyzes the operational and stock market performance of
Companies Circle’s members against other regional listed companies and
found that the portfolios of member companies were less affected by the
global financial crisis. For example, their share prices fell only 41.3
percent in 2008, compared to a drop of 49.3 percent for other Latin American
“We always believed that sound corporate governance practices pay off,
and today we are encouraged to see this belief supported by the findings
of the practical guide,” said Andre Covre, Chairman of the Companies Circle
and CFO of Ultrapar, Brazil. “With these tangible results, we are confident
that efforts to improve corporate governance practices at our companies
and those within Latin America as a whole will foster economic development
and sustainability throughout the region.”
The publication provides unique, peer-to-peer guidance with examples and
testimonials from Companies Circle’s members sharing their experiences
in implementing good corporate governance practices. It provides a roadmap
to help companies improve their corporate governance practices in board
operations, shareholder rights, internal controls, transparency and disclosure,
and family governance.
“I intend to convince everyone that good corporate governance is the way
forward as reflected in the guide, which should be used as a template for
doing corporate governance around the world,” said Ira Millstein, Senior
Associate Dean, Millstein Center for Corporate Governance and Performance.
For more about the report, visit www.ifc.org/corporategovernance.
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 $15
billion in fiscal 2009, helping play a prominent role in addressing the
financial crisis. For more information, visit www.ifc.org.
About the Latin American Companies Circle
The Companies Circle is a group of 12 Latin American firms with demonstrated
leadership in enacting and advocating governance improvements in the region.
The companies are Argos, CCR, CPFL Energia, Embraer, Ferreyros, Homex,
ISA, Marcopolo, Natura, NET, Suzano, and Ultrapar. The circle was established
by the Latin American Roundtable on Corporate Governance, a joint initiative
of OECD and the World Bank Group, and supported by the IFC Global Corporate
Governance Forum. For more information, visit www.oecd.org/daf/companiescircle.