Plan for Latin American Corporate Governance Reform Issued
Corporate governance experts from Latin America, the Organisation for Economic Cooperation and Development (OECD) and International Finance Corporation (IFC) unveiled an action plan for corporate governance reform in the region – the White Paper on Corporate Governance in Latin America (available in English , Portuguese and Spanish ).
The White Paper, setting out consensus-based priorities for the region, was developed in co-operation with the World Bank Group through a series of meetings of the Latin American Roundtable on Corporate Governance, an initiative involving senior regulators, policy-makers, investors, business groups and NGOs from countries throughout Latin America, as well as participants from the OECD and a range of other international organisations. The White Paper was developed through discussions over the course of four Roundtable meetings held in Brazil, Argentina, Mexico and Chile between 2000 and 2003. The OECD and IFC serve as Secretariat for the Roundtable, which also receives support from the Global Corporate Governance Forum and the Inter-American Development Bank.
Among the key priorities for action identified in the White Paper are taking voting rights seriously; treating shareholders fairly during changes in corporate control and de-listings; insuring the integrity of financial reporting and improving disclosure; developing effective boards of directors; improving the quality, effectiveness and predictability of the legal and regulatory framework; and continuing regional co-operation.
The White Paper was developed using the OECD Principles of Corporate Governance as the reference for discussions, and has been adapted to address the conditions and circumstances particular to Latin America. The region’s distinguishing characteristics include the important role that industrial and sometimes financial conglomerates play in the development of privately-owned industry, combined with highly concentrated and often family-based ownership. Such characteristics suggest that particular attention is needed to ensure transparency of transactions, independent and effective board management and protection of minority shareholder rights and interests.