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The OECD has now taken an important step to facilitate the use of the OECD Principles of Corporate Governance. Following widespread demand, it has released a Methodology for Assessing Implementation of the OECD Principles. The Methodology can be used by independent assessors and for self-assessments by, inter alia, national authorities. It will also be used by the World Bank under its Review of Standards and Codes (ROSC) programme.
The Methodology differs from a number of existing assessment schemes since it is focused on actual outcomes. Rather than just looking at the letter of the law and regulations, the Methodology calls for an assessment of actual corporate governance practices and recognises that there are different techniques to implement the Principles depending on the economic and legal context.
The effectiveness of enforcement mechanisms and remedies is also considered. The quality of the regulatory and institutional framework is therefore explicitly incorporated into the assessment as is the nature of the corporate landscape, for example, the pattern of ownership and control. A working draft of the Methodology has already been used in the OECD Report, Corporate Governance in Turkey: A Pilot Study. Two annexes to the report, including a detailed principle-by-principle assessment, are also available online.
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