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Boosting the Capacity of Regional Partners to Provide Advice on Good Corporate Governance in Europe and Central Asia

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How would you resolve a dispute inside your business when the person you are having angry words with is your own brother, who also happens to be the CFO and a large shareholder? Or how about this situation: as a key member of your family-owned company’s leadership team, rather than playing the doting child, you  need to tell your own father or mother that it may be time to step back from the very business that he or she founded and then steered successfully for decades. Or maybe you think that what your company really needs now is the introduction, for the first time, of an outsider professional onto the board who is not a member of your family.

Such scenarios are all too familiar in many countries around the world, including the transition economy of Albania  where family-owned firms are increasing in number and preparing for the handover to the next generation. When family and business relationships are intertwined, typical governance-related issues, such as resolving disputes or identifying appropriate leadership transitions, take on added layers of complexity and delicacy. If they are not handled properly, they can pose a real threat to the very survival of individual business.

IFC’s Corporate Governance Program in Europe and Central Asia has been focusing on helping family-owned businesses—as well as other types of companies—address their governance challenges. When implemented sincerely and effectively, sound corporate governance enhances competitiveness, efficiency, and profitability, and enables companies to expand sustainably while also attracting much-needed investment.

A key component of IFC’s effort involves boosting the capacity of its local partners around the region to provide advice on good corporate governance and thereby help to spur private sector growth.

From 1-4 December 2014, a four-day training-of-trainers workshop in Tbilisi, Georgia, IFC, along with co-sponsors Eristavi & Partners, the Georgian Institute of Directors, the Georgian Banking Training Centre, and PMO Business Consulting,  brought together more than 25 representatives of consulting and training partner institutions from 10 countries around the region, including Albania represented by Corporate Governance Institute Albania CGIA. Participants shared knowledge on best practices and how to enhance their corporate governance knowledge base, focusing on how to help their clients improve the structures and processes by which companies are directed and controlled.

Sessions were geared toward assisting clients to develop their governance strategy, build effective boards, improve their transparency and disclosure practices, and address family governance issues. Discussions also revolved around new services such as board evaluation and certification. Tightly focused, interactive presentations were intended to reinforce learning already acquired and to enable additional knowledge sharing –and networking—among  participants.

At one of the sessions, an IFC corporate governance expert presented examples of family businesses in a range of challenging situations. Drawing on real-life experiences of family businesses , the presenter engaged with the participants, discussing the situation in detail and debating various approaches that would either resolve the problem—or make it worse.

 “We were really impressed by the quality and active nature of discussion at the Tbilisi workshop,” commented Oliver Orton, Program Manager of the Europe and Central Asia Corporate Governance Program. “Perhaps most satisfying was to see the significant progress made by our partners and the continued regional knowledge-sharing network that will be beneficial to everyone as they build their corporate governance offerings in their own markets.”