Recent corporate scandals and the recognition of the importance of corporate governance in boosting investor confidence and national economic performance has prompted ministers of the Organisation for Economic Co-operation and Development (OECD) to revisit the OECD Principles of Corporate Governance.
The non-binding set of twelve principles was first adopted in May 1999. Since their publication they have become a reference point for corporate governance initiatives around the world.
The draft text has been strengthened on several points. It spells out the right of investors to nominate company directors and maintains that shareholders should be able to communicate their thoughts about compensation policy for board members and executives as well as to question auditors. It calls for increased transparency from analysts, rating agencies and brokers to disclose conflicts of interest. It also calls for the protection of “whistle blowers” by allowing them a confidential contact at board level.
The revision of the OECD Principles follows a year-long consultation with government and business representatives, professional groups and civil society.
The OECD invites comments from the public on the revised text until 5 February. OECD governments are scheduled to approve the revised version of the principles at the annual OECD ministerial council meeting on 13-14 May 2004.