G20-OECD Principles of Corporate Governance

Recent developments in corporate governance policies and practices

Since the third edition of Tricker – Corporate Governance: Principles, Policies, and Practices published in February 2015, the subject has continued to evolve in regulation, policy, and practice. Some of the more significant developments include:

G20-OECD Principles of Corporate Governance

On 5 September 2015, the G20 Finance Ministers endorsed a new set of corporate governance principles developed by the OECD. The aims of these principles are to reinforce business integrity, improve trust in capital markets, unlock investment, and boost long-term economic growth. The intention is to provide governments and those who publish codes of corporate governance throughout the G20 nations and beyond with recommendations on shareholder rights, financial disclosure, executive remuneration, and the activities of institutional investors and stock markets.

The first OECD corporate governance principles were published in 1999 and updated in 2004 (3E, p129). Following the global financial crisis, which began in 2007, the OECD standards have been recognized as key to sound financial systems. The study leading to the 2015 revision began in 2013 and involved major international institutions including the Basel Committee on Banking Supervision, the Financial Stability Board (FSB), and the World Bank.

Details of the revised principles can be accessed at G20/OECD Principles of Corporate Governance. In launching the new principles, the authorities emphasized that ‘good corporate governance is not an end in itself, but a means to support economic efficiency, sustainable growth, and financial stability. It facilitates companies’ access to capital for long-term investment and helps ensure that shareholders and other stakeholders who contribute to the success of the corporation are treated fairly.’

Bob Tricker, January 2016

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