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| | CORPORATE GOVERNANCE UPDATES
- Finnish Corporate Governance Code 2008
Finnish Corporate Governance Code was published on October 20, 2008. The code is applicable to the listed companies. It aims to harmonize the practices followed by listed companies and the information available to shareholder and other investors and also improve the transparency of administrative bodies, management remuneration, etc. The code provides an overall picture of Central principles of the Corporate Governance system of Finish listed companies. As the corporate governance system of Finnish listed companies is based on Finnish legislation, this code complements the existing statutory procedures.
For more details, please refer to: click here....
- Sovereign Wealth Funds: Generally Accepted Principles and Practices (GAPP) - Santiago Principles
The International Working Group of Sovereign Wealth Funds (IWG) presented the Generally Accepted Principles and Practices (GAPP) - Santiago Principles to the International Monetary Fund's policy-guiding International Monetary and Financial Committee on October 11, 2008. The IWG made public the set of 24 voluntary Principles and related explanatory material and announced it has established a Formation Committee to explore the creation of a Standing Group of Sovereign Wealth Funds.
For the Principles, please refer to: click here....
- Key Agreed Principles to Strengthen Corporate Governance for U.S. Publicly Traded Companies
The National Association of Corporate Directors (NACD), US have in October 2008 created a set of Key Agreed Principles to serve as a framework for strengthening governance for U.S. publicly traded companies. These principles aims to encourage boards, managers, and shareholders to eschew a check-the-box approach in favor of thoughtful governance, tailored by boards themselves to their particular circumstances and embraced by all stakeholders. They are grounded in the common interest of shareholders boards and management teams in the corporate objectives of long-term value creation (through ethical and legal means) the accountability of management to the board and ultimately the accountability of the board to shareholders for such long-term value creation.
For the Policy, please refer to: click here....
- Aberdeen Corporate Governance Principles
In November 2008, Aberdeen Asset Management published its new Aberdeen Corporate Governance Principles. These principles provided framework for investment analysis, shareholder engagement and proxy voting for companies worldwide. The principle combines international best practice with an understanding of the economic legal and cultural context of each company. The main text of the principles is supplemented with specific examples from around the world that further illustrate many of the most important or topical issues.
For more details, please refer to: click here....
- Revised Dutch Corporate Governance Code
On the 6th of December 2004, the Minister of Finance, the Minister of Justice and the State Secretary of Economic Affairs installed the Dutch Corporate Governance Code Monitoring Committee. The Monitoring Committee's terms of reference were:
- to monitor the operation of the Dutch Corporate Governance Code and its implementation by listed companies and shareholders;
- to keep under review national and international developments in corporate governance generally, reflecting the Monitoring Committee's objective of promoting the use and topicality of the Code;
- to indicate whether there is any gap or indistinctness in the Code.
On 4th June 2008, the Committee made proposals for amendments to the Code in relation to management board remuneration, diversity in the composition of the supervisory board, shareholder responsibility and the role of the management and supervisory boards in takeovers. On Dec 10, 2008, the Monitoring Committee presented the revised Dutch Corporate Governance Code.
For amended German Corporate Governance Code, please refer to: click here....
- Third HSCI Corporate Governance Review 2008 (December 2008)
The third annual review of the Corporate Governance practices of the Companies that constitutes HSCI was conducted by Grant Thornton and they came out with the report called the Corporate Governance Review 2008. The report states that the recent economic crisis is a strong argument that global corporate governance guidelines are generally insufficient and the companies should be review their practices and monitor their strengths and weaknesses on a regular basis. Overall, the report states that compliance is improving, with the compliance rate of HSCI companies increasing to 62%. However, it adds that companies still lag far behind expectations in many areas, including low level of independence on a company's board or committees and lack of an overall strategy for organizational risk management.
For the draft of a principles-based standard, please refer to: click here....
- IFC Family Business Governance Handbook
International Finance Corporation (IFC) has in December 2008 published a new book - IFC, Family Business Governance Handbook. The Handbook recommends ways to help family businesses improve their sustainability by establishing good governance practices. It highlights corporate governance challenges facing family businesses and proposes structures and practices that can help mitigate them.
For the DVCA's report, please refer to: click here....
- An Update for Directors of Listed Companies: Going Concern and Liquidity Risk
The Financial Reporting Council published an update for directors of listed companies; going concern and liquidity risk in November 2008. The update brings together the requirements on directors to comment on going concern and liquidity risk in annual reports and accounts, in the light of the significant economic difficulties that were being experienced in the latter half of 2008. The update addresses the requirements of International Financial Reporting Standards, UK Generally Accepted Accounting Principles, the Listing rules of the Financial Services Authority, the 1994 Guidance for directors, The Companies Act 2006 and its requirements about the content of a Business Review in relation to December 2008 year ends. The update may also be useful for directors of unlisted companies.
For more details, please refer to: click here....
- Challenges for Audit Committees arising from current economic conditions
The Financial Reporting Council published Challenges for audit committees arising from current economic conditions in November 2008. The purpose of the document is to assist audit committees by identifying key questions that they may need to consider when preparing for December 2008 year end annual reports and accounts in the light of economic conditions present in the latter half of 2008. In addition to going concern and liquidity risk issues, the publication addresses year end planning, reliance on models for year end cash flow and valuation information and significant accounting and reporting judgments. The publication followed a similar document issued in December 2007, which addresses the difficulties then existing with a specific emphasis on financial services businesses.
For Small Business Act, please refer to: click here....
- FRC Guidance on Audit Committees
The FRC Guidance on Audit Committees (formerly known as the Smith Guidance) was first published in 2003 and updated in 2005. It is intended 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.
A new edition of the guidance was issued in October 2008. A limited number of changes have been made to implement some of the recommendations of the Market Participants Group (MPG), which was established 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.
For details on the proposal , please refer to: click here....
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