Regional : Strengthening Corporate Governance in ADB's Nonsovereign Investments in Developing Member Countries

Agriculture, natural resources and rural development / Agricultural production - Agro-industry, marketing, and trade - Livestock - Rural market infrastructure

Energy / Electricity transmission and distribution - Energy utility services - Renewable energy generation - biomass and waste - Renewable energy generation - geothermal - Renewable energy generation - solar - Renewable energy generation - wind

Finance / Banking systems and nonbank financial institutions - Housing finance - Infrastructure finance and investment funds - Small and medium enterprise finance and leasing

Industry and trade / Industry and trade sector development - Small and medium enterprise development - Trade and services

Water and other urban infrastructure and services / Other urban services - Urban housing - Urban solid waste management

Under this technical assistance project (TA), ADB will conduct up to ten corporate governance assessments on early and mid-stage direct equity investments and corporate finance transactions in which ADB is invested or is considering investing. Based on the governance assessments, and with the agreement of the participating companies, ADB will develop action plans to strengthen corporate governance among willing participants. For companies and enterprises willing to pursue the identified improvements, ADB will provide the necessary human and financial resources to assist them. PSOD will select early and mid-stage direct equity investments and corporate finance transactions where governance challenges have been identified as priority areas for focus under this TA. Early and mid-stage operated companies face a unique set of risks which they must surmount in order to succeed. Challenges may include inexperienced management, undercapitalization, rapid change, large consequence and small margins of error for decision-making, low levels of diversity (particularly among decision-makers), and overconfidence. This can prevent early and mid-stage companies from achieving optimal growth. Boards of these companies are often not well-equipped to assist on governance matters and may lack the independence to provide detached oversight and guidance. PSOD has also identified a similar set of corporate governance challenges at the board level in companies to which ADB provides corporate finance.

On occasion, ADB provides nominee non-executive directors to the board of director of its equity investee companies. These nominee directors are intended to add value to the client and to protect ADB's investment. Nominee directors provide supplemental skills or perspectives that facilitate the growth and prosperity of the company, assist the board to discharge its functions more effectively, and establishing or improving good governance practices. As part of this TA, PSOD will arrange for annual training and capacity building to the nominee directors.