OECD Principles of Corporate Governance

1. Adopted by the OECD Council of Ministers in 1999, the OECD Principles of Corporate Governance have become the global standard in their field Bodies Endorsing/Adopting OECD Principles Implementation OECD Principles of Corporate Governance Regional Corporate Governance Roundtables Global Issues • 31 OECD member countries • G-22 Countries • Numerous Security and Exchange Commissions Governmental • G7 International Financial Stability Forum • The World Bank • International Organisation of Securities Commissions • The Global Corporate Governance Forum International Organisations • International Corporate Governance Network (network of institutional investors with aggregate of $11 trillion under management) Private Sector

2. This global standard provides a common reference point for international policy dialogue and exchange of experience Framework of Corporate Governance Debate Implementation OECD Principles of Corporate Governance Regional Corporate Governance Roundtables Global Issues • That blend of law, regulation and appropriate voluntary private-sector practices which enables the corporation to attract financial and human capital, perform efficiently, and thereby perpetuate itself by generating long-term economic value for its shareholders, while respecting the interests of stakeholders and society as a whole* Corporate Governance Defined Chapters of OECD Principles • Shareholders’ Rights • Equitable Treatment of Shareholders • Role of Stakeholders • Disclosure and Transparency • Responsibility of Board of Directors * Millstein report

3. Pursuant to a G-7 mandate to the OECD and the World Bank, the OECD organizes and leads five regional roundtables to raise awareness of corporate governance and to develop a regional self-assessment of corporate-governance successes and areas for further reform Regional Corporate Governance Roundtables Implementation OECD Principles of Corporate Governance Regional Corporate Governance Roundtables Global Issues • Asia, Russia, Latin America, Eurasia, South-eastern Europe Regions • Peer discussion among senior policy makers, academics and businessmen using the OECD Principles of Corporate Governance as a conceptual framework Format • Policy dialogue on realising the OECD Principles in the context of each country of the region • Self assessment and regional comparison of successes and areas requiring further effort • Knowledge sharing and networking among key regional decision makers Goals • White Paper describing state of corporate governance in region and identifying areas for further reform • Consensus document adopted by representatives from the region • Blueprint for future policy work and technical assistance Output

4. The Asian Roundtable has recently issued a White Paper on Corporate Governance in Asia putting forth six key recommendations for corporate-governance reform Asian White Paper Priority Recommendations • Training and education • Codes of conduct • Technical assistance Raise awareness • Focus on public-service integrity and even-handedness • Increase regulatory and judicial resources and specialization • Use simpler and easier to enforce rules, as well as tools to augment resources (e.g., shareholder suits, whistleblowers) Improve enforcement • International Accounting Standards (IASB) • International Standards for Audit (IFAC) • International Organisation of Securities Commissions Principles Adopt International Standards and Practices • Institute training and codes of conduct • Tighten rules for “independent” directors and fiduciary duties for all directors • Promote director-accountability mechanisms (e.g., lawsuits, cumulative voting) Improve Board Performance • Strengthen ownership disclosure rules and enforcement • Explore categorical prohibitions on related-party transactions • Provide shareholders with private and collective rights of action Protect Minority Shareholders • Strengthen disclosure of ownership and financial interests • “Fit and proper” test for bank directors • Improve insolvency and creditor rights systems • Tighten regulatory oversight Improve Bank Governance