- Expanded discussion of the board’s role in upholding the social mission side of the double bottom-line (social performance)
- Expanded discussion on risk awareness, management and mitigation
- Incorporation of learning from “Weathering the Storm” on crisis management and from “Aligning Interests” on ensuring that stakeholder interests are properly aligned with institutional interests during times of transformation
- Introduction of the topic of “responsible exit.”
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This was originally posted on the Center for Financial Inclusion blog at ACCION on August 14. Several years ago the Council of Microfinance Equity Funds (CMEF) created a small booklet containing governance guidelines for microfinance institutions. The booklet quickly became a minor classic: it was translated into multiple languages and dozens of MFIs used it as a guide to operations for their own boards. Then came the 2008 global financial crisis and a number of market-specific microfinance crises in several countries. These crises served to highlight the need for strong, mission-led governance by MFIs. Lessons from these events did not alter the core principles found in the original Guidelines, but they revealed a need for greater attention to areas such as risk management and social performance. In response to these lessons, CMEF is releasing a revised version of the guidelines,“The Practice of Corporate Governance in Microfinance Institutions.” The new Guidelines still address governance basics through topics such as: How to Structure an Effective Board, Effective Board Processes and Board Responsibilities and Decisions. Among the new or newly expanded topics are:
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