Outside the United States, governance systems can differ considerably, reflecting diverse legal systems and traditions for interpreting and enforcing corporate governance legislation. Non-U.S. companies may have unfamiliar capital structures, regulatory systems, and cultures that challenge U.S. thinking on corporate governance.
One of the features of non-U.S. governance regimes is the corporate governance code. Codes of governance are typically voluntary compendiums of leading practices for boards, management, and shareholders. The most well-known of these is the code produced by the Organization for Economic Co-operation and Development (OECD). The OECD Principles of Corporate Governance have proven to be a model for other codes adopted by countries around the world.
“Because so many U.S. governance practices originate overseas, I believe directors can stay a step ahead by taking a broader, more global perspective. The UK, for example, has several years of experience with ‘say on pay’ resolutions, and has offered shareholders proxy access for years. Other countries like France, Italy and Spain have introduced quotas requiring more boardroom diversity. For boards looking to increase their effectiveness, international practices can provide a fresh perspective and, sometimes, a new approach to long-standing problems. I find that international directors not only can shed light on how business gets done overseas, but also can bring an outsider’s perspective to board discussions. From a board composition perspective, global experience is an increasingly relevant qualification when seeking new directors; if you are a multinational business yet your board contains no non-U.S. directors, SEC disclosure rules relating to director background may encourage you to create a board that reflects your global customers.”
Dan Konigsburg, director, Deloitte LLP
Read the Global Center for Corporate Governance brochure.
Do You Know?
Global Proxy Watch is a weekly newsletter on international corporate governance published by Davis Global Advisors. Subscriptions are offered at www.proxywatch.com.
Transparency International is a global coalition focused on combating corruption. It is known for its annual Corruption Perceptions Index, which, in 2011, ranks 183 countries by their perceived levels of corruption as determined by expert assessments and opinion surveys.
Access specific governance information on more than 35 countries, including Argentina, Lebanon, Japan, and Italy, by visiting Getting the Deal Through. This website provides country-specific detail such as board responsibility, shareholder rights, and primary government agencies. To obtain a downloadable report by country, select a country from the Jurisdiction menu and choose “corporate governance” from the Practice Area menu.
Principles of Corporate Governance
ICGN Statement on Global Corporate Governance Principles encourage jurisdictions to address certain broader corporate and regulatory policies in areas which are beyond the authority of a corporation. Posted with permission from the International Corporate Governance Network, copyright 2005.
OECD Principles of Corporate Governance are intended to help OECD and non-OECD governments improve and evaluate the corporate governance framework for their countries.Posted with permission from the Organisation for Economic Co-operation and Development, copyright 2004.
- Methodology for Assessing Implementation of the OECD Principles on CorporateGovernance Posted with permission from the Organisation for Economic Co-operation and Development, copyright 2006.
- Using the OECD Principles of Corporate Governance: A Boardroom Perspective Posted with permission from the Organisation for Economic Co-operation and Development, copyright 2008.