Transcript The 2006 Asian Roundtable on Corporate Governance Enforcement Revisited/Boardroom Practices Motoyuki YUFU Principal Administrator Outreach Unit for Financial Sector Reform OECD Session 2 Implementation and Enforcement of Rules;

The 2006 Asian Roundtable
on Corporate Governance
Enforcement Revisited/Boardroom Practices
Motoyuki YUFU
Principal Administrator
Outreach Unit for Financial Sector Reform
OECD
Session 2
Implementation and Enforcement of Rules; Progress Made and Challenges Ahead
Bangkok, Thailand
14-15 September 2006
The views expressed in this paper are those of the author and do not necessarily represent the opinions of the OECD or its
Member countries or the World Bank
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Outline
Background; The Stock-Take Report
1. Regulatory Enforcement
2. Shareholder-Initiated Enforcement
3. Implementation; CG Codes, Principles and Guidelines
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The Stock-Take Report of the White Paper

The White Paper 2003 agreed on a stock-taking in a few years

Purpose: reference source for Roundtable economies and public to
assess progress of implementation of 2003 White Paper Priorities

Not intended to rank or rate Roundtable economies

Based on 25 responses to Questionnaire (and further public
information). Also discussed at previous Roundtable meeting in Bali

Progress made January 2003 – March 2005 (and some updated
information available)
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The Stock-Take Report of the White Paper
(Cont.)
The Report follows six priorities for reform of the
White Paper
1.
2.
3.
4.
5.
6.
Awareness Raising
Implementation and Enforcement of Laws and
Regulations
Convergence with International Standards for
Accounting, Audit and Non-Financial Disclosure
Function of Boards of Directors
Protection of Non-Controlling shareholders
CG of Banks
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1. Regulatory Enforcement
Often involves many organisations; For instance,
 Justice Ministry
 Finance/Treasury Ministry
 Commerce/Industry Ministry
 Company Affairs Ministry
 Company Registrar
 SEC or FSA
 Stock Exchange
 Central Bank
 Police
 Public Prosecutors Office
 And more…
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1. Regulatory Enforcement (Cont.)
Coordination among relevant organisations for better law
enforcement

China; Bureau for Investigation of Securities Crime (Ministry of
Public Security, on the premises of CSRC)

Malaysia; High-Level Committee on CG Enforcement (Securities
Commission, Royal Malaysian Police and Companies
Commission)

Thailand; Department for Special Investigation (DSI) (and the
WG system among DSI, SEC, Public Attorney and Bank of
Thailand)
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2. Shareholder-Initiated Enforcement


The White Paper recommends shareholders be permitted
derivative and/or class-action suits
“No consensus has emerged from the Roundtable on the
derivative versus class-action issue.” (White Paper #148)

Among 13 economies 10 had provided for Derivative suits
while 8 for Class Action suits (White Paper 2003)

After the publication of the White Paper, the OECD Principles
were revised. Revisions include putting more emphasis on
shareholders’ suits.
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2. Shareholder-Initiated Enforcement (Cont.)

Derivative Suits
– Hong Kong; legislation to provide for statutory derivative
suits

Class-Action Suits
– Korea; Class-action suits legislation was adopted and came
into force.
– Thailand; Draft class-action suits legislation has been
proposed.
– Chinese Taipei; A law established the Investor Protection
Centre; it has filed 41 class-action suits (as of May 2005)
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3. Implementation; CG Codes, Principles and
Guidelines
Since 2003…
 Bangladesh; Voluntary Code (Bangladesh Enterprise
Institute) and mandatory Code (SEC)
 Hong Kong; Revised Listing Rules to introduce Code
(Stock Exchange)
 Indonesia; Revised 2001 Code (National Committee
for Governance)
 Korea; Revised Code (Committee on CG)
 Pakistan; Manual for the 2002 Code (SECP)
 Singapore; Revised Code (MoF)
 Thailand; Revised Principles (Stock Exchange)
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3. Implementation; CG Codes, Principles and
Guidelines (Cont.)
Efforts continue and most Roundtable economies
now have CG Codes or equivalent.
Further improvements on this could be…

“Comply or Explain”

Public Consultation

Revision and Update; CG is evolutionary in its nature
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Thank you

The Stock-Take Report will be made public next
month.

Also, check the OECD web site for the Policy Brief on
CG of Banks in Asia (June 2006)
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