OECD reviews corporate governance principles in wake of financial crisis

The Organisation for Economic Cooperation and Development (OECD) is reviewing its now 15-year-old set of six corporate governance principles.

The Paris-based body first launched the principles in 1999 and revised them in 2004. The review is being undertaken by the OECD’s Corporate Governance Committee and a public consultation on a first draft text of the revised Principles is planned for late 2014.

The principles (full list below) deal with issues such as shareholder rights and ownership, the equitable treatment of shareholders and the role of stakeholders in corporate governance.

“The rationale for the review is to ensure the continuing high quality, relevance and usefulness of the Principles taking into account recent developments in the corporate sector and capital markets,” the OECD says. “The outcome should provide policy makers, regulators and other rule-making bodies with a sound benchmark for establishing an effective corporate governance framework.”
The principles’ “core values” should be maintained and where necessary strengthened to “reflect experiences since 2004” and the global financial crisis.The OECD is also consulting on a draft revision of its Guidelines on Corporate Governance of State-Owned Enterprises. It’s to take into account developments since they were adopted in 2005 – and the experiences of the countries that have implemented them.

The revision process is undertaken by the OECD Working Party on State Ownership and Privatisation Practices, which is chaired by Norway’s Anders Berg. The deadline for a second consultation was September 8. The next step is a meeting of a working party on October 22-23. The revised guidelines are due to be submitted to the OECD Corporate Governance Committee for approval on November 5-6.

OECD Corporate Governance Principles:

1. Ensuring the Basis for an Effective Corporate Governance Framework
2. The Rights of Shareholders and Key Ownership Functions
3. The Equitable Treatment of Shareholders
4. The Role of Stakeholders in Corporate Governance
5. Disclosure and Transparency
6. The Responsibilities of the Board