Navigating Non-Financial Risks in Multilateral Development Banks: A Case Study of the International Finance Corporation (IFC)

This 60-minute panel explores how the International Finance Corporation, the private sector investment and financing arm of the World Bank Group, manages enterprise risk by balancing its development mandate with robust risk controls in emerging markets. As an international organization, IFC invests in emerging market private sector companies across all sectors. Its mandate is the relief of poverty, but it also needs to maximize development impact, be sustainable and maintain its AAA credit rating. Through two examples—a Turkish cross-border bank and a West African agricultural business—the discussion examines three key themes:

The panel begins by analyzing IFC's approach to risk management functions. It illustrates how it handles traditional risks (market, credit, liquidity, business integrity, E&S, strategic) and emerging risks (AI, cybersecurity) through specialized departments and cross-functional collaboration.

The discussion then focuses on IFC's implementation of the Three Lines Model: business-originating staff who "own the risk," independent risk and compliance functions providing advisory and technical support, and internal audit ensuring independent oversight of processes and systems. This structure helps maintain clear responsibilities while enabling appropriate decision-making at field levels.

Finally, the session examines IFC's Risk Appetite Statement for the management of business integrity risks (know your customer/KYC, bribery, corruption, money laundering, transparency and tax evasion), and its practical application across different investment products. While maintaining an overall low-risk appetite, IFC takes calculated risks in fragile countries with high development impact potential while being more conservative with hard-to-exit investments.

This panel is particularly relevant given IFC's unique position as a self-regulated international organization operating across 100 countries. It illustrates how international financial institutions can maintain AAA ratings while fulfilling development mandates in challenging markets, offering valuable insights for risk management professionals working in complex global environments.

Panel:

Ceri Lawley, Chief Compliance Officer, International Finance Corporation, World Bank Group

Andy Guangji Xue, Business Integrity Associate, International Finance Corporation, World Bank Group

Moderator:

H.S. Bob Kostakopoulos, Deputy Program Director & Part-Time Lecturer, Enterprise Risk Management

This is a hybrid event and will be hosted both in person and via Zoom.

Registered guests will receive a Zoom link prior to the event.

For questions about this event, please contact Joshua Gleich, jg4173 [[at]] columbia [[dot]] edu.

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