Corporate Governance and Access to Finance - ESBG

nThe study also shows that Corporate Governance components whichare under the control of the institutions have more influence onpromoting better accessibility to financial services than the countrycomponents, connected to the national legal framework or thebusiness environment. In this respect, the “internal” elements ofCorporate Governance that contribute most to a higher Access toFinance are (i) the inclusion of a clear reference to Access to Financein the mission statement of the institution; (ii) the separation betweenCEO and Chairperson; (iii) the existence of an external audit, aninternal Corporate Governance Code and/or a rating from an externalagency, and (iv) the proportion of women in the Board.Corporate Governance practices to improve Access to FinancennnThe members of the WSBI are diverse, including public banks,cooperatives, mutuals, postal savings institutions, private institutionsetc. Each of these types of institutions has certain specificities fromthe point of view of Corporate Governance, given their specificorganizational and ownership structure (see section 3). Despite thesedifferences, they share a number of common Corporate Governancecharacteristics.This similarity is partly the result of the fact that most WSBI memberscomply with standard Codes of Corporate Governance, although thelatter are in general designed for shareholder-driven institutions.Overall compliance with such codes and standards, in accordance withBasel Committee recommendations, is beneficial for any financialinstitution. It is however advisable to tailor these codes to the specificcharacteristics and mission of WSBI members, which share a “doublebottom line” objective. It is desirable that Corporate Governancemechanisms in these institutions reflect a balance between the twoobjectives of Access to Finance and sustainability.For institutions having a strong financial inclusion aim, it is importantto include an explicit reference to this objective in the mechanismsthat ensure accountability of the governing bodies. Clarity of theAccess to Finance mission is indeed essential to ensure that businessstrategic policies and operations are directed towards this goal.15