G20, OECD issue new corporate governance code

The new G20/OECD Principles of Corporate Governance was released by the OECD on the sidelines of the G20 minister level meetings, on 5th September.

The new code calls for enhanced cross-border cooperation among regulators, including through bilateral and multilateral arrangements for exchange of information. It also states that the impediments to cross-border voting by shareholders should be eliminated, while shareholders should be allowed to consult each other.

The new code also contains recommendations for financial disclosures by the companies, behaviour of large institutional investors and the functionalities of the stock markets. It also asks regulators to ensure that conflict of interest in related party transactions are addressed effectively.

On remuneration of board members and key executives, the link between the executive pay and the company’s long-term performance is key information for the shareholders and must be adequately disclosed.

Other information about board members including their qualifications, selection process, other company directorships and whether they are regarded as independent also need to be disclosed actively.

The code also prescribes detailed suggestions for the responsibilities of the Board.

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About surenraj

“Views expressed are my own”
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