Understanding the framework of our development agenda

This Assessment Tool was developed for use by equity and debt investors during the due diligence process when considering investment in an SME. It serves as a guidance for project teams in analysing risks related to governance and identifying suitable mitigating factors. It provides a structured and effective framework for project teams to consider how improving governance can contribute to the financial and developmental goals of their organization.

• The tool for investor includes questions and brief explanatory notes to help project teams conduct effective interviews with potential investees.
• The worksheet can help set the direction of the investor engagement and serve as a basis for Governance Action Plan design and negotiations with the client.

This Tool is seen as a “living document”. Users are encouraged to adapt it to the unique nature of their portfolio and investment process. The Tool can be amended to reflect each user’s own experience in the governance of their portfolio companies as shareholder, investor, and board member. The experience of project teams in application of the Tool will test the value addition to the investment process and generate critical feedback for improving its content and structure. Integrating corporate governance tools into the investment processes has proven to be an iterative process at other DFIs.

SME Governance Assessment Tool Worksheet

SME Governance Assessment Tool for Investors