Corporate Governance 2001: New rules of good behaviour

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Corporate Governance 2001: New rules of good behaviour

Equity buyers are increasingly basing investment decisions on companies’ records on corporate governance as well as on projected real shareholder returns. The challenge for investors is to measure and reward good corporate governance practice as readily as they have criticized bad corporate governance in the past. Euromoney offers its own contribution, with a new corporate governance ranking and also reproduces analyses by banks. For investors and companies, especially in emerging markets, new rules of engagement are being drawn up. Kapila Monet reports, research by Andrew Newby

Methodology

Emerging market company respondents

Developed market company respondents

Top 25 in Asia


Troika Dialog profiles of Russian companies

For some hard-bitten corporate executives and the more cynical investors, the concept of corporate governance is doubtless too nebulous and idealistic to bother with. But for many it has acquired sufficient substance to serve as a kind of benchmark for how well, or badly, companies are run, and thus to influence global investment decisions.


Corporate governance became a hot topic from 1998 on in the aftermath of the Asian economic crisis. At first, the discussion was primarily in the public policy and activist realm. But the OECD, the World Bank, the International Corporate Governance Network (ICGN) and numerous regional and national committees have now opened up the debate globally.


An international standard of corporate governance was produced in May 1999 when OECD ministers adopted five fundamental principles, covering the rights of the shareholder, the equitable treatment of shareholders, the role of stakeholders, disclosure and transparency, and the responsibilities of the board. These principles have become one of the 12 international financial stability standards along with the Basle accords, international accounting standards and so on.


"Everybody now recognizes the importance of benchmarking their efforts to a global benchmark," says Stilpon Nestor, the OECD's head of corporate affairs.





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