Asian Roundtable on Corporate Governance

1
Asian Roundtable on Corporate Governance
The White Paper on Corporate Governance in Asia
Robert Zafft Senior Corporate Governance
Specialist OECD
Tokyo, Japan 20 November 2003
The views expressed in this paper do not
necessarily represent the opinions of the OECD or
its Member countries
2
The OECD and the World Bank organize and lead
five regional roundtables to raise awareness of
corporate governance and to develop regional
self-assessments of corporate-governance
successes and areas for further reform
Regional Corporate Governance Roundtables
OECD Principles of Corporate Governance
Regional Corporate Governance Roundtables
Global Issues

• Asia, Russia, Latin America, Eurasia,
  South-eastern Europe

Regions

• Peer discussion among senior policy makers,
  academics and businessmen using the OECD
  Principles of Corporate Governance as a
  conceptual framework

Format

• Policy dialogue on realising the OECD Principles
  in the context of each country of the region
• Self assessment and regional comparison of
  successes and areas requiring further effort
• Knowledge sharing and networking among key
  regional decision makers

Goals

• White Paper or comparative paper describing
  state of corporate governance in region and
  identifying areas for further reform
• Consensus document adopted by representatives
  from the region
• Blueprint for future policy work and technical
  assistance

Output
3
Between 1999 and 2003, the Asian Roundtable met
five times to assess regional developments and to
draft a White Paper identifying common policy
objectives
Asian Roundtable Meetings
OECD Principles of Corporate Governance
Regional Corporate Governance Roundtables
Global Issues

• Seoul, Korea Regional Overview

1999

• Hong Kong China Disclosure and Transparency

2000

• Singapore The Responsibilities of the Board
  and the Role of Stakeholders

2001

• Mumbai, India The Rights and Equitable
  Treatment of Shareholders

2002

• Kuala Lumpur, Malaysia -- White Paper drafting
  session and workshop on enforcement and
  implementation

2003
4
The White Paper on Corporate Governance in Asia
puts forth six priority recom-mendations for
corporate-governance reform and has thus far been
welcomed or endorsed by the securities
commissions of 75 of Asian-Roundtable countries
Asian White Paper Priority Recommendations
(www.oecd.org/corporate)

• Training and education
• Codes of conduct
• Technical assistance

Asian Roundtable Sponsors Government of Japan,
Global Corporate Governance Forum, ADB
Raise awareness

• Focus on public-service integrity and
  even-handedness
• Increase regulatory and judicial resources and
  specialization
• Use simpler and easier to enforce rules, as well
  as tools to augment resources (e.g., shareholder
  suits, whistleblowers)

Improve enforcement

• International Accounting Standards (IASB)
• International Standards for Audit (IFAC)
• International Organisation of Securities
  Commissions Principles

Adopt International Standards and Practices

• Institute training and codes of conduct
• Tighten rules for independent directors and
  fiduciary duties for all directors
• Promote director-accountability mechanisms
  (e.g., lawsuits, cumulative voting)

Improve Board Performance

• Strengthen ownership disclosure rules and
  enforcement
• Explore categorical prohibitions on
  related-party transactions
• Provide shareholders with private and collective
  rights of action

Protect Minority Shareholders

• Strengthen disclosure of ownership and financial
  interests
• Fit and proper test for bank directors
• Improve insolvency and creditor rights systems
• Tighten regulatory oversight

Improve Bank Governance
5
Focusing on the priority areas for reform
identified by the White Paper, the next phase of
the Asian Roundtable will address practical
implementation and enforcement issues
Roundtable Implementation and Global Issues Phase
Implementation
OECD Principles of Corporate Governance
Regional Corporate Governance Roundtables
Global Issues

• Seoul, Korea, mid-2004

Implementation

• International conference on issues recurring
  among several regional Roundtables where a global
  perspective is appropriate
• e.g., Alternative dispute resolution and
  corporate governance (mid-2004)

Global Issues