4.3 International Standards

International standards play a vital role in harmonizing corporate governance practices across different jurisdictions. These standards provide a benchmark for best practices and ensure that companies operate transparently and ethically on a global scale.




OECD Principles of Corporate Governance

The Organisation for Economic Co-operation and Development (OECD) has developed a set of principles that serve as a global standard for corporate governance. The OECD Principles of Corporate Governance are designed to assist governments in improving the legal, institutional, and regulatory framework for corporate governance. Key principles include:

  • Ensuring the Basis for an Effective Corporate Governance Framework: Governments should establish a framework that promotes transparency and accountability.

  • Rights of Shareholders and Key Ownership Functions: Shareholders should have the right to participate in key corporate decisions and to be informed about the company's performance.

  • Equitable Treatment of Shareholders: All shareholders, including minority and foreign shareholders, should be treated equitably.

  • Role of Stakeholders in Corporate Governance: The governance framework should recognize the rights of stakeholders and encourage active cooperation between corporations and stakeholders.

  • Disclosure and Transparency: Companies should provide accurate and timely information on all material matters, including financial performance, governance, and ownership.

  • Responsibilities of the Board: The board should have the necessary authority and be accountable for overseeing the management of the company.

Basel Accords

The Basel Accords are a set of international banking regulations developed by the Basel Committee on Banking Supervision. These accords aim to strengthen the regulation, supervision, and risk management of banks globally. Key components include:

  • Basel I: Introduced in 1988, Basel I focused on capital adequacy and established minimum capital requirements for banks.

  • Basel II: Introduced in 2004, Basel II expanded the framework to include supervisory review and market discipline, emphasizing risk management practices.

  • Basel III: Introduced in response to the 2008 financial crisis, Basel III aims to improve the banking sector's ability to absorb shocks and to strengthen bank capital requirements.


Last modified: Friday, 18 October 2024, 11:43 AM