Governance is a major risk facing the microfinance sector today ("Banana Skins" 2008). Sustainable requires not only financially viable institutions that operate according to existing legal frameworks, but [a transparent and efficient organizational structure appropriated by all the institution’s stakeholders—(salaried staff, elected officials, clients, members, TA providers, donors, or shareholders).

CERISE’s approach to governance starts by identifying stakeholders and decision-making processes in order to analyze the MFI’s capacity to manage crises, plan strategically and prevent risk.

Governance is critical to the success of any institution. The "art of governing" goes beyond the technical relationships between a Board and management. It is about the political stakes of power relationships, conflicts of interest and the clear definition of roles and responsibilities.

CERISE developed a Handbook to analyze MFI governance based on an approach focused on stakeholders and their decision-making influence. The Handbook for the Analysis of Governance of Microfinance Institutions is designed for MFIs and TA providers looking to align mission with actions.

Social performance governance refers to the strategic and operational decision-making processes stakeholders use to pursue the institution’s social mission and enact its social policy.

Effective social performance is based on a strong relationship between social strategy and governance. An MFI that integrates its social mission into governance mechanisms is better equipped to manage its social performance. It enables the MFI to strike that delicate balance between financial and social bottom lines and take into account the perspectives of all those affected by the institution—owners and directors, management and staff, users (clients or members), the community and the environment.

Deeply knowledgeable of the relationship between governance and social objectives, CERISE proposes to help take governance analysis a step further, to social performance management.

The Handbook for Analysis of Governance of MFIs served as the basis for the Microfinance Capacity-Building Initiative in Francophone Africa’s (CAPAF) governance training program, designed with IRAM.
The Handbook is widely used as:
- an evaluation and decision making tool for MFIs and their networks (used in Togo, Mexico, Bolivia and with cooperatives affiliated with the Confederation of Financial Institutions (CIF) in West Africa;
- a training tool (CAPAF/CGAP West AFrica, CERISE);
- a reference document in university courses.