“G20/OECD PRINCIPLES OF CORPORATE GOVERNANCE”

JOELLY IAN SANCHEZ BARRERA

UNIVERSITY PILOTO DE COLOMBIA

FINANCIAL ENGINEERING

BOGOTA D.C, 2018

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Through corporate governance, it will promote the transparency and fairness of markets,
optimizing the efficient allocation of resources, for this requires a solid legislative, regulatory
and institutional framework in order that all players that is find the market enter into
contractual relationships that are private in a transparent manner.
Countries wishing to apply the principles should be a framework of corporate governance
which includes regulatory requirements and quote to consolidate a contribution to the
integrity of the marketplace and maintain economic performance. In order to meet what was
said above the framework of corporate governance will be developed taking as a reference
the impact on overall economic performance, integrity of the market and incentives for the
promotion of transparency and proper functioning.
The OECD is a unique forum where the Governments of 30 democracies work together to
address the economic, social and environmental challenges posed by globalization. The
OECD also leads the efforts to understand and help Governments to respond to new
developments and concerns, such as corporate governance, the information economy and the
challenges of population ageing. The organization provides a means whereby Governments
can compare policy experiences, seek answers to common problems, identify good practices
and work in national and international policy coordination
The principles of corporate governance of the G20 and OECD will help evaluate and improve
the legislative and regulatory framework seeking to strengthen a more efficient economy and
sustainable economic growth. “The main objective of corporate governance is to facilitate the
creation of an atmosphere of trust and transparency, all of this in search of stronger growth
and to the development of more inclusive societies. Collaboration with the G20 and search
that the principles have a global reach.”(g20/ OECD principles of corporate governance,2015,
17)
The OECD member countries are: Germany, Australia, Austria, Belgium, Canada, Chile,
Korea, Denmark, Slovenia, Spain, United States of America, Estonia, Finland, France,
Greece, Hungary, Ireland, Iceland, Israel, Italy, Japan, Luxembourg, Mexico, Norway, New
Zealand, Netherlands, Poland, Portugal, United Kingdom, Czech Republic, Sweden, Slovak
Republic, Switzerland and Turkey. The European Commission participates in the work of the
OECD
The principles are understandable to an international level assessing quality framework of
corporate governance to develop mandatory standards to take into account the legal,
economic, and cultural differences of each country.
The objectives of corporate governance are also formulated in codes and voluntary standards
that lack of range of law or regulation. To this must be a division of responsibilities among
the different authorities given that there is a risk that the diversity of applicable legal
provisions may cause unintentional overlaps and even conflicts, which can frustrate
the capacity of key corporate governance objectives. Therefore important that policymakers
are aware of the danger and take steps to limit it.

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You must clearly assign the different authorities in order that are respected and to exercise the
maximum efficiency in the different areas and different complementary organs. This
regulation of the securities markets will promote an effective, because corporate governance
that would improve the quality of the rules and regulations of securities markets that have the
criteria of contribution to the issuing companies and govern the operations in the markets
constitutes an important element of the framework for corporate governance. Currently, the
majority of large bags are themselves listed corporations whose objective is to maximize
profits and competing with other stock exchanges and markets of negotiation with the same
purpose.
The responsibilities of supervision, regulation, and enforcement actions will be attributed to
functionally independent bodies; it accountable in the exercise of their functions and
powers; and that they have powers, adequate resources and the competence to carry out its
functions and exercise its powers, including with regard to corporate governance. The ability
to attract a competitive staff will increase the quality and independence of monitoring and
enforcement actions.
“High levels of foreign societies and cross-border operations require a strong international
cooperation among regulatory authorities, inter alia, through bilateral and multilateral
systems of exchange of information.”(g20/ OECD principles of corporate governance,2015,
32).
In several countries are granted other rights, such as the adoption or choice of Auditors, the
appointment of the members of the Board of Directors, the ability to pledge the shares,
adoption of benefit-sharing, the Faculty vote on the remuneration of the members of the
Board of Directors and senior management, the adoption of essential operations with related
parties, etc.
On the principles he advocates equal treatment to domestic and foreign shareholders in
corporate governance. Regulation of foreign direct investment policy does not address
them. There is a certain risk that a legal system that allows any investor use that decisions of
a society before the courts can extend to an excess of lawsuits.
Participation in general meetings is a fundamental right of the shareholders. There have been
cases in which executives and major investors have tried to dissuade minority or foreign
investors of their attempts to influence the direction of the company. In some societies it has
demanded a payment for voting.
You have long known that, in dispersed companies, some shareholders may have so reduced
participation in it that does not compensate them the cost of exercising their rights or
investing efforts in the control of the results.
There is a special risk of abuse when the legal systems and the market accepts the majority
shareholders to exercise a degree of control that does not correspond to the level of risk they
take in quality of holders to take advantage of legal mechanisms to separate the property of
the control, such as pyramidal structures or multiple voting rights.

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The third principle we have increased securities markets, institutional investors and other
intermediaries and their presence as agents that make independent decisions influences on
incentives and the ability to participate in Government corporate. “The effectiveness and
credibility of the entire framework of corporate governance and business monitoring rely
heavily on the willingness and the ability of institutional investors to exercise their rights as
shareholders informed and meet of their duties as owners is effective in the companies in
which they invest.”( G20/OECD Principles of Corporate Governance,2004,43)
It should be noted that this principle does not apply to the exercise of voting rights by trustees
or other persons acting under a legal imperative special (e.g., bankruptcy administrators and
executors of estates). Stock markets will facilitate a fair and effective determination of prices
to encourage an effective corporate governance.
Rules on insolvency of companies differ greatly from one country to another. Some, when
societies are close to this situation, the legal system provides that managers must act in
defense of the interests of creditors, which, consequently, can play a leading role in the
Government corporate. Other countries have systems that favor that the indebted society
promptly reveals difficulties that is going through, so that you can agree on a solution with its
creditors.
Insolvency proceedings usually require efficient systems for reconciling the interests of
different classes of creditors. In many countries special rights, such as those acquired through
the financing of a debtor in bankruptcy process that retains the possession and administration
of their property, and which encourage and protect new funding to a company are
recognized that is in bankruptcy.
In the majority of countries is collected a lot of information, both compulsory and voluntary,
on listed companies and also on large companies, but without quotation, that is subsequently
diffused among a wide range of users. The fifth principle is reflected in the disclosure of
information and transparency.
The principles behind the timely disclosure of all relevant developments arising during the
time between the various periodic reports. Also in them is advocated disclose all relevant or
required information simultaneously, so that to guarantee equal treatment between
shareholders. By maintaining close relations with investors and market agents, companies
shall ensure that it does not impinge on this fundamental principle of equitable treatment.
One of the basic rights of investors is to receive information on the ownership structure of the
company and in relation to the holders of other rights. This shall also apply to an enterprise
group structure and relations within it. In cases where large investments in shares are property
through intermediaries, information systems or structures on the effective beneficiaries will
be, accordingly, accessible, at least for the regulators and surveillance or to the judicial
authorities.
In addition, in this sense, may be useful model of the OECD of options for obtaining
information about the beneficiary ownership and Control and the guide of the Group of
financial action on transparency and property beneficiary.
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In foreseeable risk factors within these principles is proposed to disseminate information
sufficient and comprehensive enough to fully inform investors about the material and
foreseeable risks affecting the company. Reporting on the risks acquired its greater efficiency
when it conforms to the specific company and the sector in question. The dissemination of
information on the system of monitoring and risk management is gaining acceptance as a
good practice.
Some countries require a thorough dissemination of information on human resources. Policies
in this area, such as the programme for the development and training of human resources,
plans for the retention of employees and plans for participation in the ownership of the
company, may reveal to the market players important data on the competitive strengths of the
companies.
The structures and policies of Government, including the contents of all code or corporate
governance policy and the procedure for its implementation. It will be mandatory that
companies disclose their practices of corporate governance in its regular reports. The
disclosure of the structures and policies of corporate governance, which includes, in the case
of non-operating holding companies, the significant subsidiaries, it is important to assess the
level of governance and will include the distribution of authority between shareholders,
directors and members of the Board of Directors.
Within this principles of speaks of transparency therefore information will be developed and
will be made public according to high quality standards in the field of accounting and
reporting financial and non-financial. The disclosure of this information is compliant and will
be developed using open, independent and public procedures with the participation of the
private sector and other stakeholders, as professional associations and independent experts.
The channels used to disseminate the information will allow users to access relevant
information in equitable, timely and efficient manner in terms of cost. While in many cases
the laws have the disclosure of information, present it and access it can be difficult and
expensive. Standards for a continuous dissemination of data that includes both the periodic
dissemination of information as the consistent or timely dissemination of data in the form will
be established. The IOSCO principles of information public periodical of the entities listed
establish guidelines relating to the periodic reports of the issuers of listed securities or whose
contribution is licensed in a regulated market, involving small investors.
Within the structures and procedures of the Council there are some responsibilities of the
governing body which corresponds to the beginning of sixth number in which the framework
for corporate governance should ensure the strategic orientation of the company, the effective
control of the address by the Council and the accountability to the company and shareholders.
In some countries, the Council is obligated to act to be run in the interest of the company, for
the benefit of shareholders, staff and the public interest. In the interests of the company, it is
necessary to prevent the direction of becoming a cyst in his position. This principle
articulates two fundamental elements of the fiduciary duty of the members of the Council: the
duty of care and that loyalty. The first forces them to act with knowledge of cause, good faith
and with due diligence and care.
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The principles should be considered a living document. A priority of the OECD is to ensure
that widely spread and practiced. This includes manufacturers of continuous, regulatory and
regulatory policy who can change the practical experience of the implementation of the
principles. The OECD also will continue to oversee the development and identify new trends
and challenges that merit attention. As an important part of the future work, the OECD
international dialogue among multiple groups of shareholders in corporate governance this
dialogue between companies, investors, service providers, workers and others will be the
most global possible and It will provide the important opportunity to ensure that the OECD
principles remain relevant and are used in the private sector. Beyond the principles, the
guidelines for corporate governance of State-owned companies will be an aspect of such a
dialogue once they agree on them.
The next phase of the process of the regional roundtable for countries that are not members is
underway. The OECD. In the case of the Russian Roundtable, participants have agreed to
create two ad hoc working groups to examine options for policy in two priority areas: the
transition to the internationally recognized standards of the financial report and
the appearance of both. Transactions between parties such as the conditions of transparency
of concentration of ownership and control. Round tables in Asia, Latin America and the
Euro's southeast will focus on the instrumentation and the implementation of the
recommendations set out in the OECD documents. Within a short time Roundtable of Eurasia
a general description of the company in the region, that the priorities of additional actions to
be performed in the complementary phase.
REFERENCES
G20/OECD PRINCIPLES OF CORPORATE GOVERNANCE © OECD 2015 All rights
reserved ([Link]
G20/OECD Principles of Corporate Governance (Originally published by the OECD in
English and French under the titles: Policy Brief: The OECD Principles of Corporate
Governance OEC 2004. All rights reserved.)

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