Page 87 - SBL Integrated Workbook STUDENT 2018

Approaches to governance

International convergence

The competitiveness of nations is a preoccupation for all governments because:

 Harmonisation and liberalisation of financial markets mean that foreign
companies now find it easy to invest in any marketplace.

 A drive towards international standards in business practices to sit alongside
the global shift in applying International Accounting Standards (IASs).

Two organisations have published corporate governance codes intended to apply to
multiple national jurisdictions.

4.1 The Organisation for Economic Cooperation and Development (OECD)

The OECD provides a forum in which to establish and co-ordinate policies.

Content of the OECD principles:

 ensuring the basis for an effective corporate governance framework

 the rights of shareholders and key ownership functions

 the equitable treatment of shareholders

 the role of stakeholders in corporate governance

 disclosure and transparency

 the responsibilities of the board.

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