Transcript The Importance of Good Corporate Governance for State-Owned Enterprises Daniel Blume, Principal Administrator, OECD.

The Importance of Good Corporate
Governance for State-Owned Enterprises
Daniel Blume, Principal
Administrator, OECD
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Presentation: two parts
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1. The role of the OECD and key conclusions
emerging from its 2004 review of the OECD
Principles of Corporate Governance.
2. Moto Yufu: How does the White Paper on
Corporate Governance in Asia seek to put the
Principles into practice in the Asian context?
Vietnam can usefully draw upon both.
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The OECD as global standard-setter
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OECD is a “club” of 30 developed democracies
sharing common approach to market economy.
Consultation and co-operative programmes with 75100 countries in nearly all regions of world.
Corporate governance work a good example: five
regional roundtables in Asia, Latin America, Eurasia,
Russia and Southeast Europe. Work also starting in
the Middle East and North Africa.
OECD Principles of Corporate Governance promoted
by Financial Stability Forum, World Bank Group, and
international dialogue
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Why does good corporate governance
matter?
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By reducing cost of capital and improving
company management, increases economic
competitiveness and contributes to private
sector-led economic growth.
Lowers risk of financial crisis, contributing to
global financial stability
Contributes to legitimacy of market economy
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Core Elements of the OECD Principles
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Ensuring the basis of an effective CG
framework
The rights of shareholders
The equitable treatment of shareholders
The role of stakeholders including creditors
and depositors
Disclosure and transparency
The responsibilities of the boards
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Some key priorities emerging from the
review of the Principles
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New chapter in the Principles emphasises the need
for overall framework to support implementation and
enforcement.
Shareholder rights must be secure and must be
exercised, supported by adequate disclosure, to
strengthen corporate governance.
Boards play a critical role as the fulcrum between
shareholders and professional management.
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The Asian Roundtable on Corporate
Governance
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The OECD and the World Bank Group have combined
their efforts to promote policy dialogue on corporate
governance and have established the Asian Roundtable.
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The Roundtable, launched in 1999, comprises policymakers, regulators, academics and business leaders from
13 Asian countries/economies including Vietnam.
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Roundtable participants representing diverse interests
agreed on White Paper recommendations and priorities
specific to the region in 2003.
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The White Paper builds upon the OECD Principles of
Corporate Governance.
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The White Paper Six Priorities
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Priority 1. Continued awareness raising regarding
the value of corporate governance;
Priority 2. Effective implementation and enforcement
of corporate governance laws and regulations;
Priority 3. Convergence with international standards
for accounting, audit and non-financial disclosure;
Priority 4. Developing effective boards of directors;
Priority 5. Protecting non-controlling shareholders;
Priority 6. Improving the regulation and corporate
governance of banks.
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Future Work of the Asian Roundtable
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The next phase of the Roundtable focuses on
implementation and enforcement issues; the stocktaking of developments and progress is scheduled in
2005.
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2 task forces concerning common challenges in Asia
will be established to provide policy briefs for the next
Roundtable (2005):
- corporate governance of state owned enterprises
- corporate governance of banks
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Putting the OECD Principles into Asian context:
The White Paper on Corporate Governance
in Asia
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Asia constitutes a diverse region in areas such as legal tradition
and regulatory infrastructure.
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Different jurisdictions may adopt different approaches to the
same concerns based on their understanding of national
conditions.
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Based on these understanding, the White Paper distils common
policy recommendations in Asia.
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“National conditions may determine how corporate
governance aspirations should be fulfilled, but these
conditions do not excuse jurisdictions from fulfilling them.”
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