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New OECD Corporate Governance Principles Agreed
www.uscib.org/index.asp?DocumentID=2836
OECD member governments in late April approved new principles on corporate governance that will set more demanding standards on the protection of shareholders' interests than the 1999 guidelines they replace. The new guidelines will be formally approved at the annual OECD ministerial meeting in mid-May.
Veronique Ingram, who chairs the OECD steering group on corporate governance, said the revised principles "emphasize the importance of a regulatory framework in corporate governance that promotes efficient markets, facilitates effective enforcement and clearly defines the responsibilities between different supervisory, regulatory and enforcement authorities."
Among numerous revisions, the OECD principles say that shareholders should be able to remove board members and have full information on their pay, that anti-takeover devices such as "poison pill" measures should not be used to protect management and the board from accountability, and that corporate whistle-blowers should be protected.
The principles state that employee participation in corporate governance "should be permitted to develop.” Some European governments and labor unions had reportedly wanted a call for such worker participation to be "encouraged.”
“The OECD principles are a welcome effort to set out high standards for countries to aspire to” said Thomas Niles, president of USCIB. “They were formed with extensive consultation with BIAC. The task now is to make these high standards a reality for developing countries.”
BIAC had counseled OECD members in February to avoid a “one size fits all” approach to corporate governance standards. “Every national regulatory system has to find its own balance between regulation by governments and self-regulation,” BIAC stated.
To learn more: www.uscib.org/index.asp?DocumentID=2836
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