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| | CORPORATE GOVERNANCE UPDATES
- The OECD Steering Group on Corporate Governance continues dialogue with alternative investors
The OECD Steering Group on Corporate Governance invited representatives from the activist hedge fund industry and other activist investors on 16th April 2008 to discuss potential policy issues including their use of shareholders rights (such as board nomination), the impact of their activism on market abuses prevention,
the scope for shareholder cooperation into the light of "acting in concert" regulations, as well as the use of
derivatives instruments to boost investors' voting power.
The Chair of OECD Steering Group on Corporate Governance stated that regulatory framework should allow the development of shareholders' activism and any intervention aimed at addressing specific policy issue should be informed by careful analysis about the nature of the issue and about the costs and benefits of the proposed policy actions.
For more details, please refer to: click here....
- CalPERS Global Principles of Accountable Corporate Governance (April 2008)
The California Public Employees' Retirement System (CalPERS) one of the largest US public pension fund. CalPERS created a framework of the Global Principles of Accountable Corporate Governance to influence the global markets through advancing corporate governance dialogue and providing an educational forum by representing a foundation for accountability between a corporation's management and its owners
For the Principles, please refer to: click here....
- Railpen Hong Kong Corporate Governance Policy
On May 13, 2008, RAILPEN Investments issued their Hong Kong Corporate Governance Policy, the first stand-alone corporate governance policy by a UK pension fund for Hong Kong. As a long-term investor, RAILPEN is interested in fostering good corporate governance at the companies in which it invests.
For the Policy, please refer to: click here....
- Japan White Paper on Corporate Governance launched
On May 15, 2008, the 'White paper on corporate Governance in Japan', a new policy document on corporate
governance in Japan was published by ACGA.
The "Japan White Paper" is the first collaborative effort of its kind focussing on corporate governance
issues in Japan and involving global institutional investors.
The paper states that sound corporate governance is essential to build a more internationally competitive
corporate sector in Japan and to the longer-term growth of the Japanese economy and its capital
markets
The White Paper makes recommendations on six key issues:
- Recognition of shareholders as owners of listed companies
- Efficient use of capital
- Independent supervision of management
- Pre-emption rights and third-party share placements
- Poison pill takeover defences
- Fairness and transparency in shareholder voting
For the White Paper, please refer to: click here....
- OECD Asian Round Table on Corporate Governance, 13-14 May 2008
The Asian Roundtable on Corporate Governance was organised by OECD in collaboration with Hong Kong Securities and Futures Commission, the Hong Kong Institute of Chartered Secretaries (HKICS) and the Hong Kong Institute of Certified Public Accountants (HKICPA) on 13-14 May 2008 at Hong Kong, China.
The meeting focused on effective monitoring of related-party transactions and introduced new work by the OECD on regulatory impact assessments. The meeting also provided opportunities for sharing information on recent initiatives by countries and organisations, notably an overview of recent corporate governance developments in Hong Kong, China.
For more details, please refer to: click here....
- Proposed changes to the Smith Guidance on Audit Committees
The Guidance on Audit Committees (The Smith Guidance) was first published in 2003, to assist company boards when implementing the sections of the Combined Code on Corporate Governance dealing with audit committees and to assist directors serving on audit committees in carrying out their role.
The Financial Reporting Council is currently consulting on proposed changes to the guidance as part of the implementation phase of its choice in the UK Audit Market project. This follows the recommendations of the Market Participants Group (MPG), which was established in October 2006 to provide advice to the Financial Reporting Council on market-led actions to mitigate the risk that could arise in the event of one of more of the Big Four audit firms leaving the market. The Group's final report, contain 15 recommendations to enhance the efficiency of the UK audit market.
The document on proposed changes to Guidance on Audit Committee (The Smith Guidance) was hosted for public comments.
For the documents, please refer to: click here....
- Combined Code on Corporate Governance (2008)
The Combined Code on Corporate Governance sets out standards of good practice in relation to issues such as board composition and development, remuneration, accountability and audit and relations with shareholders.
All companies incorporated in the UK and listed on the Main Market of the London Stock Exchange are required under the Listing Rules to report on how they have applied the Combined Code in their annual report and accounts. Overseas companies listed on the Main Market are required to disclose the significant ways in which their corporate governance practices differ from those set out in the Code.
The Combined Code was first issued in 1998 and has been updated at regular intervals since then. At present two versions are in effect: the 2006 edition, which applies to accounting periods beginning on or after 1 November 2006; and the June 2008 edition which applies to applies to accounting periods beginning on or after 29 June 2008.
The June 2008 edition incorporates changes made following a review by Financial Reporting Council of the impact and effectiveness of the Code held during 2007. The changes:
- remove the restriction on an individual chairing more than one FTSE 100 company; and
- for listed companies outside the FTSE 350, allow the company chairman to sit on the audit committee where he or she was considered independent on appointment.
For the Combined Code (2008), please refer to: click here....
- Guidance on Auditor Liability Limitation Agreements
The Financial Reporting Council (FRC) on 30th June 2008 published guidance on the use of agreements between companies and their auditors to limit the auditor's liability, as provided for under the Companies Act 2006.
The guidance:
- explains what is and is not allowed under the 2006 Act;
- sets out some of the factors that will be relevant when assessing the case for an agreement;
- explains what matters should be covered in an agreement, and provides specimen clauses for inclusion in agreements; and
- explains the process to be followed for obtaining shareholder approval, and provides specimen wording for inclusion in resolutions and the notice of the general meeting.
For the Guidance, please refer to: click here....
- 2008 ICGN Annual Conference-Globalisation of Capital Market: Impact on Corporate Governance
2008 ICGN Annual Conference-Globalisation of Capital Market: Impact on Corporate Governance was organized on June 18-20,2008 at Seoul. The conference focused on the globalization of capital markets and the impact this has on traditional corporate governance
For more details, please refer to: click here....
- Southeast Europe Regional Securities Workshop
he Toronto Center and the Bulgarian Financial Supervision Commission with the support of the Global Corporate Governance Forum (GCGF), ATTF and IOSCO, organized a Seminar Sofia, Bulgaria on June 23-27,2008. The seminar aimed at strengthening the capacity of supervisory authorities in Southeastern Europe on enforcement and fraud prevention.
The participants invited were from leading international corporate governance and capital market experts, who presented the best practices, discussed case studies and provided substantive advice on how to prevent market manipulation and abuse, improve effective enforcement mechanisms and develop leadership
For more details, please refer to: click here....
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