Corporate Governance and Access to Finance - ESBG

nnnAt the same time, the distance and the potential conflicts of interestsbetween owners and clients is a focus of debate, which is of courseless relevant the closer they are. At the far end of the spectrum, in themutual or co-operative models 11 , when clients and owners cancoincide, this conflict is eliminated [see Oliver Wyman (2008) for areview of the cooperative model in the financial sector].More generally, the role of other stakeholders – customers, employeesand public administration (and in the end taxpayers) – has beensubject to intense debate (see for instance Walker Review, 2009).Depending on their nature, number and dispersion, these stakeholders’objectives may be more or less likely to enter into conflict amongthemselves and with the owners’ objectives. The clarity and consistencyof the objectives of the institution, as well as the diversity in themembers of the board, are key elements in balancing these interests.Competition in other markets in which the entity operates may entailan additional discipline device. Particularly capital markets play a rolein this regard, not confined to the trading of equity for shareholderinstitutions, but also other securities, hybrid instruments, fixed ratesecurities, etc, which normally entail some obligations in terms oftransparency and Corporate Governance. The possibility that theentity has a credit rating (sometimes an obligation related to listing incertain markets) implies also certain transparency and CorporateGovernance obligations. The labour market could also introduceelements of discipline, to the extent that attracting the best talentsrequires good Corporate Governance standards.The influence of regulation and supervision is a very important factorin the Corporate Governance structure, specifically from the point ofview of the discipline imposed on the entity. In weak institutionalenvironments banking supervision is very often the only source ofpressure towards sound Corporate Governance. Nevertheless, asstressed by Mülbert (2010), the emphasis of banking regulation andsupervision on the interest of depositors (and debtors in general) mayconflict with that of owners. It is interesting to note in this regard that,according to Beltratti and Stulz (2009), “banks with more shareholderfriendly boards performed worse during the crisis.11 According to WSBI data, 4 of its members are co-operative banks or their associations(Asociación La Nacional de Ahorros y Préstamos, Dominican Republic; Banque PopulaireCaisse d’Epargne/BPCE, France; Federación de Cajas de Crédito y Bancos de losTrabajadores, El Salvador; Cooperativa de Crédito para o Desenvolvimento Rural,Mozambique) and 5 of them are mutual banks or their associations (Federación deMutuales de Ahorro y Préstamo de Costa Rica; Asociación Popular de Ahorros y Préstamos,Dominican Republic; Dongbu Savings Bank, Korea; Korean Savings Banks Group).47