Press Releases

IFC and the State Bank of Pakistan Conduct First Local Conference on Bank Governance

In Cairo:  
Sebastian Molineus  

Program Manager, IFC Corporate Governance Program  

Phone: +20-10-520 1432

Karachi, May 29, 2006— The International Finance Corporation, the private sector arm of the World Bank, partnered today with the State Bank of Pakistan and the Pakistan Institute of Corporate Governance in conducting a conference on bank corporate governance reforms in Pakistan.  The event was attended by senior representatives from Pakistan’s banking sector, who discussed best practices and how to move the reform agenda forward.        

The conference gathered high-level decision-makers in the area of bank corporate governance, including central bank representatives, directors of leading banks, heads of banking associations and other key stakeholders. The main objective was to provide guidance on how to develop and implement a national reform agenda for sound bank corporate governance.  

“The event aimed to stimulate a nationwide dialogue on corporate governance among the participants, and to share experiences and lessons learned. This offers an opportunity to develop a common approach on how to introduce as well as implement bank corporate governance reforms in the country,” commented Sebastian Molineus, IFC’s Corporate Governance Program Manager for the Middle East and North Africa region.

According to Kaiser Naseem, Manager of the Pakistan Corporate Governance Project at IFC, “Banks play a crucial role in Pakistan’s economic development, as they provide financing to enterprises. However, by the nature of the business, banking carries inherent risks, which can cause a major crisis. Hence it is critically important that banks adhere to strong corporate governance practices.”

“The conference aspired to create increased understanding of the need for good governance among Pakistan’s banking sector. The issue becomes even more important in light of the recent revision of key corporate governance guidelines and best practices by the Organization of Economic Cooperation and Development and the Basel Committee. Moreover, in recent years the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan have taken major reform initiatives in this field,” noted the Governor of Pakistan’s State Bank, Shamshad Akhtar, in her keynote address.

What is corporate governance, and why is it so important?

Corporate governance refers to the structures and processes for the direction and control of corporations. Corporate governance specifies the distribution of rights and responsibilities among the main participants in a corporation—including shareholders, directors and managers—and spells out the rules and procedures for making decisions on corporate affairs.  A company committed to good corporate governance has well-defined shareholder rights, a solid control environment, high levels of transparency and disclosure, and an empowered board of directors.

Corporate governance is critical for banks and other companies as it improves access to capital, attracts premium valuations, and offers financing on better terms. Corporate governance also improves performance. It results in better leadership, oversight, work processes, compliance, and accountability, while reducing conflict. Corporate governance can also make (or break) reputations, by creating confidence, establishing goodwill, and building or restoring trust in the market.

Investors care about corporate governance, as well-governed companies tend to outperform their peers, safeguard and provide for higher returns on investment, protect shareholder rights, and provide assurance that management acts in the best interest of the company and all shareholders. Governments also care about corporate governance because it develops the public and private capital markets, reduces vulnerability to financial crises, and improves a country’s ability to mobilize, properly allocate, and monitor investments.  All of these benefits foster economic growth.

The State Bank of Pakistan began operating in 1948. Its mission is to promote monetary and financial stability and foster a sound and dynamic financial system, so as to achieve sustained and equitable economic growth and prosperity in Pakistan.  For more information, visit

The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C.  IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent.  Its 178 member countries provide its share capital and collectively determine its policies.

The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications.

In Karachi:
Jameel Ahmed
Director – State Bank of Pakistan
Phone: +92-21-921 2507