The G20/Organisation for Economic Co-Operation and Development (OECD) Principles of Corporate Governance (the Principles) are one of the Financial Stability Board’s (FSB) key standards for sound financial systems. The Principles are designed to apply to publicly traded companies, both financial and non-financial, and cover the following areas:
- ensuring the basis for an effective corporate governance framework;
- the rights and equitable treatment of shareholders and key ownership functions;
- institutional investors, stock markets and other intermediaries;
- the role of stakeholders in corporate governance;
- disclosure and transparency; and
- the responsibilities of the board.
The Principles also serve as the foundation for a number of sector specific documents on corporate governance, including: the Basel Committee on Banking Supervision’s Corporate governance principles for banks, the OECD’s Guidelines for Pension Fund Governance, and the International Association of Insurance Supervisors’ Principles on Corporate Governance of Insurers.
In light of the importance of the Principles the FSB has decided to launch a peer review on how its members have applied them to publicly listed financial institutions. The peer review has the following objectives:
- take stock of the implementation of the Principles as they pertain to listed financial institutions by FSB member jurisdictions, identifying effective practices and areas where good progress has been made while noting gaps and areas of weakness;
- inform the update that is currently underway of the OECD’s Assessment Methodology that the World Bank uses as part of an initiative to assess countries’ corporate governance frameworks and company practices;
- provide input to the governance-related aspects of the FSB’s broader work on conduct for financial institutions; and
- identify possible areas of follow up or whether further work could be undertaken to further promote effective governance within financial institutions.
Feedback on the peer review is to be submitted by 9 September 2016. The peer review report will be published in early 2017.