Corporate Governance and Access to Finance - ESBG

nnMechanisms to ensure management accountability vis-à-vis theseobjectives, especially in the case of public banks, are also needed.• The definition of the mission of CMAC Arequipa in Peru is a goodexample of clarity: “to benefit segments of the population lackingfinancial support of traditional banking”.• Postbank of Kenya provides another good example of soundaccountability practices, through a performance contract that setsquantitative and precise objectives of Access to Finance (like acertain increase in the deposit base, in the number of customers’accounts or in the establishment of point of sales). Managementperformance is evaluated against these objectives.Financial regulation and supervision tend in general to favor CorporateGovernance practices that consider the interest of all stakeholders(in particular depositors), beyond the narrow interest in maximizingshort-term shareholders’ value. This need to take into account theinterest of a broad group of stakeholders in the management ofbanking institutions has been enhanced by the global financial crisis.One of the distinguishing features of WSBI members is precisely thatthey are oriented towards the interest of a wider group of stakeholders.Representation of these stakeholders in the governing bodies of theinstitution should reflect this reality through an appropriate balance.The recent global financial crisis has highlighted also the damagingimpact of the pro-cyclical behaviour of certain segments of thefinancial system, which exacerbates real economy fluctuations.The long term orientation of their business strategies implies thatWSBI members tend to establish a more permanent relationship withtheir clients, lending more in relative terms in the bad times, makingtherefore a significant contribution to the stability of the financialsystem, and at the same time supporting the efforts towards greaterAccess to Finance.16