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Keep pace with
Corporate Governance Worldwide
Paris,
1 September 2004
- A new ICC book published this month provides a comprehensive guide to
corporate governance best practices.
The book, titled Corporate
Governance Worldwide, is intended to help companies meet real-world
expectations of good practices.
ICC spoke to the book's
author, Güler Manisali Darman,
to find out why corporate governance
should be paramount in business.
Why is corporate
governance such a hot issue these days?
Darman: Recent corporate scandals and failures, each stemming from
different causes, mean companies and institutions cannot afford to have
their reputations tarnished by inadequate oversight, lack of transparency
and irresponsible business conduct. The decline in public trust has to
be restored. Good corporate governance is an essential element of sustainable
economic growth in a market economy. Beyond these developments, the waves
of privatization, stringent listing requirements, company ratings, mergers
and acquisitions as corporate control mechanisms, the increasing role
of institutional investors - mainly pension funds - and finally, globalization,
have all been among the driving forces behind the evolving role of corporate
governance.
What are the most
important elements that contribute to good corporate governance?
Darman: Transparency
and disclosure in financial reporting have become the two watchwords of
good corporate governance. Broad, timely and accurate disclosure of information
about financial and operating performance is central to effective board
oversight. Accountability and loyalty of the board to both the company
and the shareholders are also fundamental concerns. The equal treatment
of shareholders and the preservation of their rights are the aims of good
corporate governance. Once shareholders have invested in a company, the
capacity to exercise their rights may be abrogated by the management of
the corporation, minimizing their power to influence the company. Independence
however, is the most important feature because it facilitates board objectivity,
required to review management activity.
Good corporate governance
practices are more than box-ticking exercises. Companies should understand
the substance of what is needed and not simply comply with a form.
Is the drive for
good corporate governance mainly centred in the West? Is there a single
approach to good governance?
Darman: Good
corporate governance is not only a concern of the West. Given the variety
of ownership structures, cultural differences and the changing nature
of capital markets and legal environments, there is no tailor-made, one-size-fits-all
governance structure. There is however, an appreciation and common understanding
of policy direction. Despite increasing convergence of best practices
in the global community, we must not forget that corporate governance
is a moving target that needs to be aligned and updated according to changing
needs. This requires patience and a long-term vision.
How can your book
help?
Darman: The
book, as its title implies, provides a comprehensive overview of corporate
governance worldwide. It shows the driving forces behind governance movement.
It underlines the responsibilities of the board and cites good practices
that make for an effective board. The book also investigates what constitutes
a good director.
Corporate Governance
Worldwide explores the rights of shareholders as well as analyzing
the increasing role of institutional investors. It spotlights potential
accounting minefields and guides readers in a successful transition to
international financial reporting standards - one of the main pillars
of corporate governance.
All of the issues
covered in the book are backed up with sound examples and real-world case
studies that provide evidence of how the principles of good governance
are being applied in different regions of the world.
Corporate Governance
Worldwide presents the opinions of distinguished professionals in the
field and suggests how companies can think strategically.
It concludes with
the question: "what is next" in corporate governance practices.
Who will your book
appeal to?
Darman: The
book is a practical guide for directors, managers, accountants, lawyers
and academics. In short, it appeals to anyone with an interest in corporate
governance and how to achieve it.
About the author
Güler Manisali Darman, the author of Corporate Governance Worldwide,
is Financial Coordinator of Bilkent Holding SA and has had extensive experience
in finance, accounting and corporate oversight. She is a member of the
ICC Commission on Financial Services and Insurance. Her book is a comprehensive
guide that provides an update of breaking developments in the field and
recommendations for how business should react to new governance requirements
generated by governments and the marketplace.
For further information
or to order a copy of Corporate Governance Worldwide, please visit
the ICC Business Bookstore
View
ICC Corporate Governance Website
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