Investors demand good corporate governance free of corruption
Paris, 29
February - Investors
and lenders are using their financial muscle to demand high standards of corporate
governance in what has become a market-based global movement against corruption,
Ira Millstein, a leading business expert in this field asserted today.
Speaking at a conference
of business and government experts at the International Chamber of Commerce,
Mr Millstein said the movement was no longer being driven mainly by public policy
makers, academics or consultants.
"We are seeing real
evidence that confirms that investors and lenders have gotten the message and
are using their capital to demand good governance."
ICC called the conference
to examine the implications for business of the OECD Principles of Corporate
Governance and the OECD Anti-Bribery Convention that came into force in February
1999.
Mr Millstein said that in
making decisions whether to invest in a particular company or region, capital
providers are now more intently considering such factors as adequacy of disclosure,
minority shareholder rights, board structure and process, as well as corruption,
cronyism and bribery.
The American lawyer said
that a joint OECD/World Bank investor task force with investors representing
over $3 trillion of assets concluded at its first meeting that organizations
that create emerging market indexes should consider corporate governance as
a part of their index.
Another group, the Russell
20-20 of 20 major pension funds and 20 major money managers, was selecting countries
to study and evaluate on issues of governance among other matters.
"These investors will
be heard… Because of their sheer size, these funds need a balanced porfolio
and must diversify their investments - which mea
ns investing in a wide variety
of securities - both domestic and international."
Mr Millstein is a senior
partner of Weil, Gotshal and Manges LLP, where he practises in the areas of
antitrust, government regulation, corporate law and corporate governance. He
is Chairman of the Joint OECD-World Bank Private Sector Advisory Group on Corporate
Governance.