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The Importance of Good Corporate Governance for State-Owned Enterprises. Daniel Blume, Principal Administrator, OECD. Presentation: two parts. 1. The role of the OECD and key conclusions emerging from its 2004 review of the OECD Principles of Corporate Governance.

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the importance of good corporate governance for state owned enterprises

The Importance of Good Corporate Governance for State-Owned Enterprises

Daniel Blume, Principal Administrator, OECD

presentation two parts
Presentation: two parts
  • 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.
the oecd as global standard setter
The OECD as global standard-setter
  • OECD is a “club” of 30 developed democracies sharing common approach to market economy.
  • Consultation and co-operative programmes with 75-100 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
why does good corporate governance matter
Why does good corporate governance matter?
  • 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
core elements of the oecd principles
Core Elements of the OECD Principles
  • 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
some key priorities emerging from the review of the principles
Some key priorities emerging from the review of the Principles
  • 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.
the asian roundtable on corporate governance
The AsianRoundtable on Corporate Governance
  • The OECD and the World Bank Group have combined their efforts to promote policy dialogue on corporate governance and have established the Asian Roundtable.
  • The Roundtable, launched in 1999, comprises policy-makers, regulators, academics and business leaders from 13 Asian countries/economies including Vietnam.
  • Roundtable participants representing diverse interests agreed on White Paper recommendations and priorities specific to the region in 2003.
  • The White Paper builds upon the OECD Principles of Corporate Governance.
the white paper six priorities
The White Paper Six Priorities
  • Priority 1.Continued awareness raising regarding the valueof 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.
future work of the asian roundtable
Future Work of the Asian Roundtable
  • The next phase of the Roundtable focuses on implementation and enforcement issues; the stock-taking of developments and progress is scheduled in 2005.
  • 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

putting the oecd principles into asian context the white paper on corporate governance in asia
Putting the OECD Principles into Asian context: The White Paper on Corporate Governance in Asia
  • Asia constitutes a diverse region in areas such as legal tradition and regulatory infrastructure.
  • Different jurisdictions may adopt different approaches to the same concerns based on their understanding of national conditions.
  • Based on these understanding, the White Paper distils common policy recommendations in Asia.
  • “National conditions may determine how corporate governance aspirations should be fulfilled,but these conditions do not excuse jurisdictions from fulfilling them.”