Corporate governance oecd principles sep 2015

1. Presented by -
Ankush Thathai
M.com (Honours) sem 4
UBS, Panjab University
Organisation for Organisation for
Economic Cooperation Economic Cooperation
and Developmentand Development

2. Organisation for Economic Organisation for Economic
Cooperation and DevelopmentCooperation and Development

3. Principle Number 1
Ensuring the basis for an effective
corporate governance framework

4. The corporate governanceThe corporate governance
framework should be developedframework should be developed
with a view to its impact onwith a view to its impact on
overall economic performance,overall economic performance,
market integrity and themarket integrity and the
incentives it creates forincentives it creates for
market participants and themarket participants and the
promotion of transparent andpromotion of transparent and
well functioning markets.well functioning markets.

5. 2. The legal and regulatory2. The legal and regulatory
requirements that affect corporaterequirements that affect corporate
governance practices should begovernance practices should be
consistent with the rule ofconsistent with the rule of
law, transparent and enforceable.law, transparent and enforceable.

6. The division of responsibilities
among different authorities
should be clearly articulated and
designed to serve the public
interest.

7. Stock market regulation should
support effective corporate
governance

8. Cross-border co-operation shouldCross-border co-operation should
be enhanced, including throughbe enhanced, including through
bilateral and multilateralbilateral and multilateral
arrangements for exchange ofarrangements for exchange of
informationinformation

9. Principle Number 2
The rights and equitable treatment
of shareholders
and key ownership functions

10. Basic shareholder rights
should include
(1) secure methods of ownership registration
(2) convey or transfer shares
(3) obtain relevant and material information on
the corporation on a timely and regular basis
(4) participate and vote in general
shareholder meetings
(5) elect and remove members of the board
(6) share in the profits of the corporation.

11. 1. Amendments to the statutes, or articles of
incorporation or similar governing documents of
the company
2. The authorisation of additional shares
3. extraordinary transactions, including the
transfer of all or substantially all assets, that in
effect result in the sale of the company
Shareholders should be sufficiently
informed about,

12. ● Shareholders should have the opportunity to
participate effectively and vote in general
shareholder meetings
● Shareholders should have the opportunity to
ask questions to the board, including questions
relating to the annual external audit, to place
items on the agenda of general meetings, and
to propose resolutions, subject to reasonable
limitations.
● Effective shareholder participation in key
corporate governance decisions, such as the
nomination and election of board members

13. Impediments to cross border voting
should be eliminated

14. Principle Number 3
Institutional investors, stock
markets,
and other intermediaries

15. ● Institutional investors acting in a fiduciary
capacity should disclose their corporate
governance with respect to their investments,
including the procedures.
● The corporate governance framework should
require that advisors, analysts, brokers, rating
agencies and others that provide analysis or
advice relevant to decisions by investors,
disclose and minimise conflicts of interest.

16. Insider trading and market
manipulation should be prohibited
and the applicable rules enforced.

17. Stock markets should provide fair
and efficient price discovery as a
means to help promote effective
corporate governance

18. Principle Number 4
The role of stakeholders in
corporate governance

19. The rights of stakeholders that are
established by law or through mutual
agreements are to be respected.

20. Where stakeholder interests are
protected by law, stakeholders should
have the opportunity to obtain
effective redress for violation of their
rights.

21. Mechanisms for employee participation
should be permitted to develop.

22. Where stakeholders participate in the
corporate governance process, they
should have access to relevant,
sufficient and reliable information
on a timely and regular basis.

23. Stakeholders, including individual employees
and their representative bodies, should be
able to freely communicate their concerns
about illegal or unethical practices to the
board and to the competent publicauthorities
and their rights should not be compromised
for doing this.

24. Principle Number 5
Disclosure and transparency

25. Disclosure and transparency
includes
1. The financial and operating results of the
company.
2.Company objectives and non financial
information.
3.Major share ownership, including
beneficial owners, and voting rights.
4.Remuneration of members of the board
and key executives.
5.Related party transactions.

26. Principle Number 6
The responsibilities of the board

27. Board members should act on a fully
informed basis, in good faith, with
due diligence and care, and in the
best interest of the company and
the shareholders.

28. ● Where board decisions may affect different
shareholder groups differently, the board should treat
all shareholders fairly.
● The board should apply high ethical standards. It
should take into account the interests of stakeholders.
● Monitoring the effectiveness of the company’s
governance practices and making changes as
needed.
● Selecting, compensating, monitoring and, when
necessary, replacing key executives and overseeing
succession planning.
● Ensuring a formal and transparent board nomination
and election process.

29. References
● http://www.oecd.org/daf/ca/Corporate-Governance-Princip
les-ENG.pdf
● http://www.oecd-ilibrary.org/governance/g20-oecd-princi
ples-of-corporate-governance-2015_9789264236882-en
● http://www.oecd.org/corporate/DSG-Tamaki-CG-speech-4
Dec2015.pdf
● https://www.google.co.in/url?sa=t&rct=j&q=&esrc
=s&source=web&cd=8&cad=rja&uact=8&ved=0ahUKEwiI
0ZqNmqDLAhUQA44KHbQqCuEQFghAMAc&url=http%3A%2F
2Fwww.tuac.org%2Fen%2Fpublic%2Fe-docs%2F00%2F00
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%3D5697&usg=AFQjCNHuiUQvn49OvhospWsDk4pSvvQcGg
sig2=Ks9ineoDliJ8wRX2xm1J1A&bvm=bv.115339255,d.
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