International Financial Institution Governance: The Role of Shareholders

This chapter addresses the integral role of shareholders in the good governance of international financial institutions. It is divided into five parts, beginning firstly with consideration of the generally held concerns of all shareholders, notably, veto rights, the powers of governors, the role of executive directors, and the essential leadership responsibilities of an institution’s president. Second, the relationship between shareholders, good governance and the mobilizing of resources, in particular funding the institution effectively and developing a sustainable financial model is examined. Third, the chapter looks at the indispensable role of shareholders in maintaining a domestic legal environment conducive to the success of an international financial institution. Fourth, it highlights the role that shareholders may play in inter-institutional relationships. Fifth, and by way conclusion, this chapter argues that good shareholder governance is crucial to the success of all international financial institutions, both old and new.