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GOVERNANCE MONITORING ORGANIZATIONS

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GOVERNANCE MONITORING ORGANIZATIONS

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  1. CORPORATE GOVERNANCE DISCLOSURE CONFERENCE Organized by the Egyptian Institute of Directors withthe United Nations Conference on Trade and DevelopmentCairo - June 18, 2007CORPORATE GOVERNANCE DISCLOSURE OVERVIEWbyAndré BaladiCo-Founder: International Corporate Governance Network (ICGN)Honorary Participant: U.S. Council of Institutional Investors (CII)Member: International Advisory Board, NYSE-Euronext Stock Exchange,Advisory Committee of the U.N. Intergovernmental Working Group of Experts on International Standards of Accounting & Reporting (ISAR)

  2. SYLLABUSGLOBAL CORPORATE GOVERNANCE OVERSIGHT GROUPS UNCTAD 2006 CORPORATE GOVERNANCE DISCLOSURE GUIDANCE ICGN 2005 CORPORATE GOVERNANCE DISCLOSURE PRINCIPLES - 2 -

  3. GOVERNANCE MONITORING ORGANIZATIONS - Council of Institutional Investors (CII), Washington DC - International Corporate Governance Network (ICGN), London - Organisation for Economic Cooperation & Development (OECD), Paris - Public Company Accounting Oversight Board (PCAOB), Washington DC - UNCTAD Intergovernmental Working Group of Experts on International Standards of Accounting & Reporting (ISAR), Geneva - World Bank - Global Corporate Governance Forum, Washington DC - 3 -

  4. GOVERNANCE RATING AGENCIES Corporate Library ECGS: DSW, Ethos, PIRC, Proxinvest . . . Egan Jones FTSE-ISS Corporate Governance Index Governance Metrics International (GMI) RiskMetrics + ISS + IRRC + Deminor Moody's and Standard & Poor's Proxy Governance + Manifest + Marco Consulting Vigeo: + Ethibel + Stock at Stake + AvanziXinhua Finance + Glass Lewis- 4 -

  5. UNCTAD 2006 CORPORATE GOVERNANCE DISCLOSURE GUIDANCE Based on UNCTAD's 2002 - 2005 consultative process, together with the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). Source: UNCTAD/ITE/TEB/2006/3 - 5 -

  6. UNCTAD ON FINANCIAL DISCLOSURES Reliance on the widely recognized benchmark of the International Financial Reporting Standards (IFRSs) of the International Accounting Standards Board (IASB). The latter is advised by a Consultative Group composed of representatives from the:- International Federation of Stock Exchanges -International Chamber of Commerce -International Organization of Securities Commission (IOSCO) -International Finance Corp. - World Bank -U.S. Financial Accounting Standard Board (FASB) - European Commission - OECD - Etc. - 6 -

  7. UNCTAD ON FINANCIAL DISCLOSURES The ICGN, the OECD, as well as other major codes and reports, require that the Board of Directors provide shareholders and other stakeholders with adequate financial information. The consolidation of all subsidiaries, affiliated entities, and related parties - including "special - purpose ones" - is required (since Enron). - 7 -

  8. UNCTAD ON NON-FINANCIAL DISCLOSURES Corporate Objectives Their disclosure should highlight the maximization of long-term return to shareholders. Social and environmental objectives must now also be addressed. - 8 -

  9. UNCTAD ON NON-FINANCIAL DISCLOSURES Ownership and Shareholder Rights Ownership structure should be disclosed. Mandatory shareholding disclosure threshholds in - France: 5 %, 10 %, 20 %, 33.3 %, 50 % (within 5 days) - U.S.A.: 5 %, and thereafter following every purchase. - 9 -

  10. UNCTAD ON NON-FINANCIAL DISCLOSURES Changes in Corporate Control Transaction disclosures recommended: identity of the bidder, its funding sources, impact of the transaction . . . Shareholder approval for substantial acquisitions (e.g. over 30 % in South Africa). Equality of disclosure to be respected among all shareholders. - 10 -

  11. UNCTAD ON NON-FINANCIAL DISCLOSURES Corporate Board Structure Differences between unitary and two-tier boards. Proscription of cross-appointments of directors. Majority of truly independent directors. Independent Board Chair (from the CEO). Independent "Lead Non-Executive Director" if Chair is CEO. Board Committees : Audit, Governance, Nominations, Remunerations, etc. - 11 -

  12. UNCTAD ON NON-FINANCIAL DISCLOSURES Corporate Board Functions Disclosure of: strategic planning, major risks, management selection and succession, executive remunerations, financial controls, etc. Possible conflicts of interest of Directors should be disclosed. Stakeholders rights should be disclosed, including implementation of corporate social and environmental responsibilities. - 12 -

  13. UNCTAD ON NON-FINANCIAL DISCLOSURES Board Directors Directors should limit their board memberships. They should be professionnally qualified. They should submit to a performance evaluation process. Their remuneration should be disclosed, including severance payments in case of takeover. - 13 -

  14. UNCTAD ON NON-FINANCIAL DISCLOSURES Auditors The audit Committee of the Board should monitor the independence of auditors, ensure their rotation, and control their non-audit services. The responsibilities of the internal audit function should be disclosed. - 14 -

  15. UNCTAD ON NON-FINANCIAL DISCLOSURES Corporate Governance Adhesion to national and/or international (ICGN, OECD) codes should be disclosed. Waivers to the codes should be disclosed, according to the "comply or explain" principle. Corporate governance disclosures could be inserted either in the Annual Report or in a stand-alone corporate governance report. Corporate Governance rankings should be disclosed. - 15 -

  16. UNCTAD ON SHAREHOLDER GENERAL MEETINGS Disclosure should be made of the process for holding and voting at General Meetings in a timely fashion. Issues subject to shareholder approval should be presented individually and unbundled. It is considered good practice to allow shareholders to include items on the agenda of a General Meeting. - 16 -

  17. ICGN CORPORATE GOVERNANCE PRINCIPLES The ICGN assembles institutional investors holding stock securities exceeding US$ 15'000 billion. Founded in 1995 in Washington, its conferences are sponsored by major stock exchanges, e.g. NYSE and NASDAQ, Paris Bourse/Euronext, London Stock Exchange, Tokyo Stock Exchange, Deutsche Börse, Borsa Italiana, Bovespa, Mumbai Stock Exchange. Its conferences were organized by the U.S. Council of Institutional Investors, CalPERS, TIAA-CREF, etc. ICGN Committees: Awards, Accounting & Auditing, Voting Practices, Executive Remuneration, Non-Financial Disclosures, Securities Lending, etc. The 2007 ICGN Conference is scheduled on July 4-7, in Cape Town. - 17 -

  18. ICGN CORPORATE GOVERNANCE PRINCIPLES The 1998 and 2005 ICGN Principles were influenced by the 1998 and 2005 OECD Principles, to the elaboration of which ICGN representatives participated. ICGN Principles defend the interests of investors worldwide. - 18 -

  19. ICGN CORPORATE GOVERNANCE PRINCIPLES Main Specificities "One Share = One Vote" is a fundamental principle. Corporations should strive to excel in comparison with their global benchmark sectorial peer groups. Shareholders should be provided with the right to call a General Meeting of Shareholders. Major changes to the core business of corporations should not be made without shareholder approval. - 19 -

  20. ICGN CORPORATE GOVERNANCE PRINCIPLES Main Specificities Votes by custodians should be cast only in accordance with instructions of the beneficial owner, or his/her authorized agent. The Compensation, Nomination, and Governance Committees should be composed of a majority of independent directors. Corporate governance issues should be addressed through dialogue and, where appropriate, with concerned regulatory representatives, so as to resolve disputes through negotiation, mediation or arbitration. - 20 -

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