OECD principles should stick to corporate governance

Paris, 24 February 2003

Business wants the OECD's principles of corporate governance to play a vital role in how companies are run - but opposes efforts to weigh them down with non-governance requirements.

In the business view, the principles should remain focused on such issues as board responsibility, transparency, disclosure and the role of shareholders.

The OECD principles, first adopted in 1999, are being reviewed on the instructions of OECD ministers with the aim of evaluating weaknesses in present systems of corporate governance and identifying areas for improvement. OECD ministers are expected to receive the completed review later this year.

The principles have become an international benchmark for best practice in corporate governance, a highly political issue in the wake of recent business scandals. Corporate governance is expected to be high on the agenda of the next Group of Eight summit of leading industrial nations in Paris in May.

The Business and Industry Advisory Committee to the OECD (BIAC), is coordinating business participation in the review meetings. Edwin Williamson, a member of ICC's American affiliate, the US Council for International Business, will head the business group. It will seek to counter efforts to add non-governance issues to the OECD principles.

The business representatives at the review meeting will put forward a business view of what, if any, changes should be made to the principles, assess changes or additions proposed by OECD governments, and any proposals for implementation or enforcement mechanisms.

Some countries are already calling for the inclusion of human rights; labour rights and the environment in the principles - issues that business maintains are best dealt with in other bodies.