5/9/2015-As part of continuing efforts to promote market confidence and business integrity, G20 Finance Ministers have endorsed a new set of G20/OECD corporate governance principles.
The G20/OECD Principles of Corporate Governance provide recommendations for national policymakers on shareholder rights, executive remuneration, financial disclosure, the behaviour of institutional investors and how stock markets should function. Sound corporate governance is seen as an essential element for promoting capital-market based financing and unlocking investment, which are keys to boosting long-term economic growth.
“In today’s global and highly interconnected world of business and finance, creating trust is something that we need to do together,” OECD Secretary-General Angel Gurría said during a presentation of the new Principles with Turkish Deputy Prime Minister Cevdet Yilmaz, who chaired the G20 finance ministers meeting on 4-5 September in Ankara. “The new G20/OECD Principles represent a shared understanding of what constitutes good corporate governance. Now the priority is to put the Principles to good use and ensure better functioning financial markets.”
Turkish Deputy Prime Minister Yilmaz stressed that “the demands of investors on companies are quite rational: more transparency, more accountability and more effective corporate governance!” Mr. Yilmaz added, as the G20 Chair this year, “the G20/OECD Principles of Corporate Governance will provide significant contribution to the G20 priority of facilitating companies’ access to finance through capital markets and thus supporting investment as a powerful driver of growth.”
Developed by the OECD in 1999, the Principles have become an international reference point. They have been adopted as one of the Financial Stability Board’s (FSB) key standards for sound financial systems and serve as a standard for governments and regulators worldwide.
In 2013 the OECD launched an ambitious and inclusive review of the Principles, with all G20 countries invited to participate on an equal footing. The review also benefitted from extensive public consultations and the participation of key international institutions - notably the Basel Committee, the FSB and the World Bank, leading to the G20 agreement in Ankara.
G20 finance ministers also discussed the availability of finance for Small and Medium-Sized Enterprises, ways to improve their financing, as well as recommendations to ensure that tax policy supports, rather than hinders their growth. Ministers welcomed a Progress Report on proposed G20/OECD High-level Principles on SME Financing and a second OECD report on Taxation of SMEs.
The OECD also presented an update of its continuing work on the best strategies to ensure that investment becomes again a major driver of growth.