Resolving Corporate Governance Disputes: Training for Board Directors

The Forum successfully piloted a corporate governance dispute resolution course for board directors on May 4, 2010.

Although they are less common for well-governed companies, most companies experience corporate governance conflicts or disputes. Left unresolved, these disputes could paralyze the board, harm the company’s performance, and deter investors. Implementing effective dispute resolution processes for preventing and resolving corporate governance disputes is thus essential if the company is to succeed over the long term. Just as boards have crisis management plans, so, too, should they develop and adopt dispute resolution strategies, policies, and processes.

Hosted by the OECD, the pilot training was attended by fifty members of the Brazilian Corporate Governance Institute (IBGC) including board directors of Brazil’s largest companies. The objective of this half-day course was to raise awareness on:

- What corporate governance disputes are and how they differ from other types of disputes;
- Who is involved in such disputes and how they can affect all types of companies;
- The importance of effectively and efficiently preventing and resolving corporate governance disputes;
- The potential negative impact and cost, and the risks associated with corporate governance disputes;
- The benefits of alternative dispute resolution processes and techniques, and the limits of court litigation;
- The role of the board in properly preventing and addressing corporate governance disputes;
- How to apply dispute resolution skills in practice through a role-play exercise.

Overall, the participants considered the course to be well structured. One participant said, "What I liked best about the course is the way it was conducted. A great balance between theory, examples and practice.” 93% of the participants stated that they were satisfied or very satisfied with the overall quality of the course and unanimously enjoyed the role-play exercise. "I love this theatre stuff; it helps fix information," said another participant.
The Forum is developing a new toolkit on preventing and efficiently resolving corporate governance dispute drawing on consensus based alternatives to adjudication. The Toolkit will be available for download here from January 2011. For more information, please contact Marie-Laurence Guy at Mguy@ifc.org
See also: Mediating Corporate Governance Conflicts and Dispute. Focus 4, by Eric M. Runesson and Marie-Laurence Guy, November 2007. This publication is also available in Ukrainian.