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A guide to reporting on corporate governance Global Corporate Governance Forum and the International Center for Journalists FOREWORD To report professionally, business journalists today independent information beyond what companies provide need a solid understanding of how modern companies to be effective in rectifying wrongdoing. That informa- are run, the conditions necessary for their success and tion must be written so that it’s easy to understand and the challenges and issues that confront them. Specifi- relevant to your audience’s interests.” cally, journalists who value good corporate governance Partnering with the International Center for Journalists practices will earn their peers’ respect and build trusted (ICFJ) in the production of this Guide draws on its exten- working relationships with the companies they cover. sive experience with journalists around the world, par- Since the launch of the Media Training Program in 2007, ticularly in difficult markets. While the Forum has offered the Global Corporate Governance Forum has conducted its expertise in corporate governance, ICFJ has ensured various training workshops for journalists in the Middle that the Guide is suitably tailored to the requirements of East, Africa, South Asia, Latin America, Central Asia, and a business reporter wanting to learn about key elements East Asia, most of them in partnership with Thomson of corporate governance and what makes an interesting Reuters Foundation and Agence France-Presse. story. They not only understand what a journalist needs but also how this should be conveyed through our training During these training events, we found many examples programs. ICFJ offers extensive resources and expertise of business journalists reporting on corporate gover- far beyond what is provided in this Guide. nance practices without necessarily being aware of it. The Forum’s work with the media constitutes an important This Guide builds on the Forum’s and IFC’s experience in part of the efforts to raise awareness of the issues and providing training for business reporters, and its work in advance good corporate governance practices in emerg- producing internationally acknowledged corporate gover- ing markets and developing countries. This effort is being nance capacity-building tools and knowledge materials. made in cooperation with IFC, a member of the World It covers important topics on corporate governance and Bank Group. provides examples and case studies on investigative jour- nalism based on contributions from experienced journal- Our program’s objective is to draw on journalists’ unique ists and drawing on our own observations. ability to disseminate information on corporate gover- nance to the business community and the wider public, While the Guide is not intended to be a definitive resource and for journalists to make readers aware of company on corporate governance, it does set out some very use- activities in ways that can have a significant impact not ful principles for business reporters in emerging markets only on their shareholders but on society. Through their and developing countries. The section “About the Guide” investigations and insight, journalists can show what explains its use, purpose and function. happens when companies are poorly governed. Journal- As is the case with all of the Forum’s work, the Guide’s ists can also illustrate how companies that abide by best production involved extensive collaboration with many practice not only perform better but are more resilient in a people and organizations. Their commitment to this effort difficult economy. is gratefully appreciated in the “Acknowledgements” sec- In addition, more probing, more insightful business tion. reporting differentiates one news outlet from another and draws in the more sophisticated and informed business audience seeking information and news that is well pre- Philip Armstrong sented, thoughtful and constructive. Head, Global Corporate Governance Forum “If you’re ignoring corporate governance in your coverage of companies, you are only giving your readers part of the story,” advises Cristina Sevillano del Aguila of Stake- holders Magazine (Peru). “For investors, too, they need Our program’s objective is to draw on journalists’ unique ability to disseminate information on corporate governance to the business community and the wider public, and for journalists to make readers aware of company activities in ways that can have a significant impact not only on their shareholders but on society. WHO’S RUNNING THE COMPANY? 3 ACKNOWLEDGEMENTS Who’s Running the Company? A Guide to Reporting on Corporate Governance was accomplished thanks to the ef- forts and active participation of many around the world. The Global Corporate Governance Forum especially would like to thank Margie Freaney, main writer, and the following colleagues, peer reviewers, members of the Forum’s Private Sector Advisory Group, and the International Center for Journalists (ICFJ) for their contributions to the media Guide (by alphabetic order): Amira El SaeedAgag, Operations Officer, Edmond Mjekiqi, Strategy Analyst, IFC Advisory Services MENA IFC Environment, Social and Governance Department EGYPT USA Simone Azevedo, Founding Editor, Peter Montagnon, Sr. Investment Adviser, Capital Aberto Financial Reporting Council BRAZIL LONDON Tamal Bandyopadhyay, Deputy Managing Director, Sharon Moshavi, Vice President, New Initiatives, Mint International Center for Journalists INDIA USA Vanessa Bauza, Communications Officer, Anne Molyneux IFC Environment, Social and Governance Department CS International USA AUSTRALIA/UNITED KINGDOM Associate Operations Officer, Mahwesh Bilal Khan, Kiril Nejkov, Operations Officer, Corporate Governance, IFC - Advisory Services Middle East and North Africa IFC-Advisory Services Europe and Central Asia PAKISTAN MACEDONIA Caroline Bright, Global Product Leader, Corporate Governance Adesinaola Odugbemi External Affairs Department IFC Sustainable Business Advisory USA World Bank USA Johanna Carrillo, Senior Program Director, International Center for Journalists John Plender, Lead Writer, USA The Financial Times LONDON Corina Cepoi, Director, Chisinau School of Advanced Journalism Marjorie Pavia, Program Officer, MOLDOVA IFC Global Corporate Governance Forum USA Eric Chinje, Director, Strategic Communications Mo Ibrahim Foundation Loty Salazar, Knowledge Management Officer, UNITED KINGDOM IFC Sustainable Business Advisory USA Juan Carlos Fernandez, Sr. Operations Officer, IFC Sustainable Business Advisory – East Asia and Pacific James D. Spellman VIETNAM Strategic Communications LLC USA Craig Hammer, Media & Governance Specialist, World Bank Institute Eugene Spiro, Sr. Projects Officer, USA IFC Global Corporate Governance Forum USA Robert Holloway, Director, Agence France Press (AFP) Foundation Alexey Volynets, Associate KM Officer, FRANCE IFC Global Corporate Governance Forum USA Isimkah Ibuakah, Legal Adviser, Nigeria Corporate Governance Banking Program – IFC Sustainable Designer: Wendy Kelly Business Advisory Sub-Saharan Africa WLK Design Group Inc. NIGERIA USA Sonja Matanovic, Communications Director, International Center for Journalists USA 4 WHO’S RUNNING THE COMPANY? ABOUT THE GUIDE This Guide is designed for reporters and editors who n Shareholders are not only the ultimate stakeholders already have some experience covering business and in public companies, but they often are an excel- finance. The goal is to help journalists develop stories that lent source for story ideas. (Chapter 3, All about examine how a company is governed, and spot events shareholders) that may have serious consequences for the company’s n Understanding how companies are structured survival, shareholders and stakeholders. helps journalists figure out how the board and Topics include the media’s role as a watchdog,