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Guidance on Good Practices in Corporate Governance Disclosure

Manual by UNCTAD, 2006

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This guidance is a technical aid for regulators and companies, particularly in developing countries and transition economies. The purpose of the guidance is to help those responsible for preparing company reports to produce disclosures on corporate governance that address the major concerns of investors and other stakeholders. The publication is relevant to enterprises eager to attract investment regardless of their legal form or size. It will also serve to promote awareness in countries and companies that do not adhere sufficiently to international good practices and consequently fail to satisfy investor expectations on corporate governance disclosures. The focus is on widely applicable disclosure issues that are relevant to most enterprises: • financial and non-financial corporate governance disclosures • disclosure issues regarding general meetings, timing and means of disclosure and compliance with best practice. UNCTAD draws upon recommendations for corporate governance disclosure contained in documents from other international organizations and national governments, as well as the deliberations of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). For reference purposes, the guidance also contains a list of national and international resources on corporate governance disclosure. The publication is expected to serve as a useful tool for drawing attention to good corporate governance disclosure practices that enterprises in different parts of the world might wish to emulate.




United Nations
New York and Geneva, 2006



Symbols of United Nations documents are composed
of capital letters combined with figures. Mention of such a
symbol indicates a reference to a United Nations document.

The designations employed and the presentation of the

material in this publication do not imply the expression of any
opinion whatsoever on the part of the Secretariat of the United
Nations concerning the legal status of any country, territory,
city or area, or of its authorities, or concerning the delimitation
of its frontiers or boundaries.

Material in this publication may be freely quoted or

reprinted, but acknowledgement is requested, together with a
reference to the document symbol. A copy of the publication
containing the quotation or reprint should be sent to the
UNCTAD secretariat.



Sales No. E.06.II.D.12
ISBN 92-1-112704-1



This publication is the latest contribution of UNCTAD
and its Intergovernmental Working Group of Experts on
International Standards of Accounting and Reporting (ISAR) to
the field of corporate governance disclosure. It was prepared
on the basis of a consultative process and ISAR's deliberations
in this area during the period of 2002 - 2005 and is an updated
version of the UNCTAD 2002 report "Transparency and
disclosure requirements for corporate governance"

UNCTAD would like to gratefully acknowledge the

many contributions made by experts from the two ISAR ad hoc
consultative groups that provided valuable inputs to the drafting
of this document in 2002 and to its updated version in 2005.
These experts include: Carlotta Amaduzzi (Institutional
Shareholder Services), André Baladi (Co-Founder,
International Corporate Governance Network), Amra Balic
(Standard & Poors, United Kingdom), Ian Ball (International
Federation of Accountants, United Kingdom), John Barrass
(CFA Institute, United Kingdom), M. Baree (The Institute of
Chartered Accountants of Bangladesh), Heloisa Bedicks
(Instituto Brasileiro de Governança Corporativa), Igor Belikov
(Russian Institute of Directors), Robert Blanks (Institute of
Chartered Secretaries & Administrators, United Kingdom),
Geoffrey Bowes (The Boardroom Practice Ltd., New Zealand),
Jacqueline Cook (The Corporate Library, United States), David
Devlin (European Federation of Accountants), Istvan Friedrich
(International Business School, Hungary), Ndung’u Gathinji
(Eastern Central & Southern African Federation of
Accountants), Frederic Gielen (The World Bank Group),
Winston Griffin (Proctor & Gamble, Switzerland), Ashok Haldia
(Institute of Chartered Accountants of India), Vicki Harris
(Department for International Development, United Kingdom),
Mark Hawkins (Ernst & Young, Switzerland), Karugor Katamah


(Private Sector Corporate Governance Trust, Kenya), George
Kyriakides (Audit Office of the Republic of Cyprus), Jeremy
Leach (Department for International Development, United
Kingdom), Serge Montangero (Deloitte & Touche, Switzerland),
Paul Moxey (Association of Chartered Certified Accountants,
United Kingdom), Matthias Mueller (International Confederation
of Free Trade Unions), Mary Ncube (M. T. Ncube and
Associates, Zambia), Vijay Poonoosamy (Commonwealth
Association of Corporate Governance, Mauritius), Gregor
Pozniak (Federation of European Securities Exchanges),
Mustafizur Rahman (The Institute of Chartered Accountants of
Bangladesh), Tony Renton (Institute of Directors, United
Kingdom), John Rieger (Organisation for Economic Co-
operation and Development), Paolo Santella (CEC European
Commission), Saskia Slomp (European Federation of
Accountants), Dominique Thienpont (European Commission)
and Anthony Travis (Pricewater-houseCoopers, Switzerland).

UNCTAD extends special appreciation to Paul Lee

(Hermes Investment Management Ltd., United Kingdom) for
acting as Chairperson of the Consultative group in 2005 and for
presenting this report to the 22nd session of ISAR, in addition to
his contribution to the initial version of the report in 2002.
Special appreciation is also extended to Christine Mallin
(University of Birmingham) and Abbas Mirza (Deloitte &
Touche, United Arab Emirates) for serving as resource persons
during the consultative process in 2002, as well as Richard
Frederick (Consultant) for his valuable inputs and assistance
as a resource person in producing this final updated version of
the report.

The guidance was prepared by an UNCTAD team

under the leadership and supervision of Tatiana Krylova;
Anthony Miller prepared the document on the basis of its initial
2002 version, incorporating inputs and comments received
from experts during the 2005 consultative process; Yoseph


Asmelash made valuable inputs into the document while it was
evolving during 2002-2005; Julie Henshaw and Catherine
Katongola-Lindelof provided crucial administrative support in
finalizing the document.


The issue of corporate governance continues to
receive a high level of attention. Valuable lessons have been
learned from the series of corporate collapses that occurred in
different parts of the world in the early part of this decade.
Since then, UN member States have undertaken various
actions to strengthen their regulatory frameworks in this area in
order to restore investor confidence, and enhance corporate
transparency and accountability.

At UNCTAD's 10th quadrennial conference, which was
held in Bangkok in February 2000, member States requested it
to promote increased transparency and improved corporate
governance. In response, the Intergovernmental Working
Group of Experts on International Standards of Accounting and
Reporting (ISAR) at UNCTAD conducted a series of
consultations and deliberations on corporate governance
disclosure during its annual sessions with a view to assisting
developing countries and countries with economies in transition
in identifying and implementing good corporate governance

This was undertaken as part of the larger goal of

achieving better corporate transparency and accountability in
order to facilitate investment flows and mobilize financial
resources for economic development.

At its 21st session in 2004, the Group of Experts agreed

to consider further developments in the area of disclosures and
to update its earlier work as needed. Accordingly, the updating
work was conducted and reviewed at the 22nd session of the
Group of Experts in 2005, where it was decided to prepare this
guidance for publication and disseminate it as widely as
possible. ISAR's decision was welcomed by delegates during
the 10th session of the Commission on Investment, Technology
and Related Financial Issues in 2006, where delegates
commended the report for its usefulness and recognized the


need for tools to promote good practices in corporate
transparency and reporting.

This document is therefore expected to serve as a
useful tool for drawing attention to good corporate governance
disclosure practices that enterprises in different parts of the
world might wish to emulate.

Supachai Panitchpakdi
Secretary-General of UNCTAD



ACKNOWLEDGEMENTS ............................................... iii

PREFACE ........................................................................vii


I. FINANCIAL DISCLOSURES ....................................3

II. NON-FINANCIAL DISCLOSURES ...........................7

A. Company Objectives ..................................................7
B. Ownership and Shareholder Rights ...........................8
C. Changes in Control and Transactions Involving

Significant Assets.....................................................10
D. Governance Structures and Policies........................11
E. Members of the Board and Key Executives .............17
F. Material Issues Regarding Stakeholders, and

Environmental and Social Stewardship....................22
G. Material Foreseeable Risk Factors ..........................24
H. Independence of External Auditors ..........................25
I. Internal Audit Function .............................................26

III. GENERAL MEETINGS............................................27



ANNEX I: REFERENCES...............................................32


This guidance is a voluntary technical aid for, among
others, regulators and companies in developing countries and
transition economies. What and how organisations disclose will
depend considerably on local laws and customs. In addition,
particular industries may have some industry-specific
disclosure requirements. In order to facilitate the general
usefulness of this document, the focus is placed on widely
applicable disclosure issues that should be relevant to most

The purpose of this guidance is to assist the preparers

of enterprise reporting in producing disclosures on corporate
governance which will address the major concerns of investors
and other stakeholders. This work would be relevant to
enterprises eager to attract investment regardless of their legal
form or size. This guidance would also be useful for promoting
awareness in countries and companies that are not sufficiently
adhering to international good practices and are consequently
failing to satisfy investors’ expectations regarding corporate
governance disclosures.

This document draws upon recommendations for

disclosure relevant to corporate governance contained in such
widely recognized documents as the revised OECD Principles
of Corporate Governance (OECD Principles), the International
Corporate Governance Network (ICGN) Corporate Governance
Principles, past ISAR conclusions on this matter, the
Commonwealth Association for Corporate Governance
Guidelines (CACG Guidelines), the pronouncements of the
European Association of Securities Dealers (EASD), the EU
Transparency Directive, the King II Report on Corporate
Governance for South Africa, the Report of the Cadbury
Committee on the Financial Aspects of Corporate Governance
(Cadbury Report), the Combined Code of the UK, the United
States Sarbanes-Oxley Act, and many others (see Annex I).
References to codes in this report are provided by way of
example only, and for every individual code highlighted, there

Guidance on Good Practices in Corporate Governance Disclosure


may exist other codes that address the same issue in a similar

Reference is made to the recommendations contained

in the foregoing documents, since one objective of this
guidance is to illustrate the convergence of opinion on the
content of corporate governance disclosures. Another objective
of this guidance is to encourage countries and/or companies to
implement best international practices in a way tailored to their
particular legal requirements and local traditions by giving
various examples of existing best practices.

The guidance revisits the content of major corporate

governance codes and regulations with a focus on financial
disclosures, a range of non-financial disclosures, disclosures in
relation to general meetings, the timing and means of
disclosures and the disclosure of the degree of compliance with
local or other codes of corporate governance. The following
sections present the main recommendations on these issues.


Enterprises should disclose their financial and operating

One of the major responsibilities of the board of
directors is to ensure that shareholders and other stakeholders
are provided with high-quality disclosures on the financial and
operating results of the entity that the board of directors have
been entrusted with governing. Almost all corporate
governance codes around the world, including the OECD and
the ICGN Principles, the CACG Guidelines, the Cadbury
Report, and the King II, specifically require the board of
directors to provide shareholders and other stakeholders with
information on the financial and operating results of a company
to enable them to properly understand the nature of its
business, its current state of affairs and how it is being
developed for the future.

The quality of financial disclosure depends significantly
on the robustness of the financial reporting standards on the
basis of which the financial information is prepared and
reported. In most circumstances, the financial reporting
standards required for corporate reporting are contained in the
generally accepted accounting principles recognized in the
country where the entity is domiciled. Over the last few
decades, there has been increasing convergence towards a set
of non-jurisdiction specific, widely recognized financial
reporting-standards. The International Financial Reporting
Standards (IFRSs) issued by the International Accounting
Standards Board provide a widely recognized benchmark in
this respect.

Furthermore, the board of directors could enrich the
usefulness of the disclosures on the financial and operating
results of a company by providing further explanation, for
example in the Management's Discussion and Analysis section

Guidance on Good Practices in Corporate Governance Disclosure


of the annual report, on critical accounting estimates1 of the
company in addition to the disclosure required by the
applicable financial reporting standards.

The board could clearly identify inherent risks and

estimates used in the preparation and reporting of the financial
and operational results of the company in order to give
investors a better understanding of the risks they are taking in
relying on the judgement of management. For example, in
some cases, financial reporting measurement requirements call
for the valuation of certain assets on a fair value basis.
However, while for certain assets deep markets might exist and
fair value could be obtained with reasonable objectivity, that
might not be the case for others. Situations of the latter kind
may invite management to exercise great latitude and influence
the direction of earnings in its favour by resorting to less
objective estimates based on modelling hypothetical markets.
In addition to the disclosure required by the applicable financial
reporting standards, the board of directors may provide further
comfort to shareholders and other stakeholders by disclosing
that the board or its audit committee has reviewed fair value
computations, if any, and that the computations were
conducted in an objective manner.

The board’s responsibilities regarding financial
communications should be disclosed.

1 An example of a definition of critical accounting can be found in

the United States Securities and Exchange Commission Release number
33-8098, according to which an accounting estimate would be considered
critical when it requires management to make significant judgement in
making assumptions about matters that were highly uncertain at the time
the estimate was made; and when alternative estimates that management
could have reasonably used, or changes in the accounting estimate that
are likely to occur from period to period, have material impact on the
financial and operating results of the company.

I. Financial Disclosures


A description of the board’s duties in overseeing the
process of producing the financial statements should be
provided. This is useful for supporting the notion that the board
is responsible for creating an overall context of transparency. It
is generally accepted that the board has responsibility for
reporting on the financial and operating results of the
corporation. Almost all corporate governance codes describe
the basic responsibility of the board for reviewing financial
statements, approving them, and then submitting them to
shareholders. When the duties of the board in this area are
clearly disclosed, shareholders and other stakeholders could
find it useful in providing an additional level of comfort
regarding the fact that the financial statements accurately
represent the situation of the company.

The quality of financial disclosure could be undermined

when consolidation requirements on financial reporting are not
followed appropriately. In this respect, the board of directors
could provide additional comfort to users of its financial reports.
For example, the board of directors could state that it had
ascertained that all subsidiaries and affiliated entities, including
special-purpose ones, which are subject to consolidation as per
the financial reporting standards applicable to the entity, have
been properly consolidated and presented.

Enterprises should fully disclose significant transactions
with related parties.

Many shareholders and stakeholders would be interested
in information that would help them determine that
management is running the enterprise with the best interest of
all shareholders and stakeholders in mind and not to unduly
benefit any related parties (see also section II.E.6 below on
conflict of interest). Most national financial reporting standards,
and IFRS, require extensive disclosure on this matter.
However, in circumstances where the financial reporting

Guidance on Good Practices in Corporate Governance Disclosure


requirements are less stringent, as a minimum, the board of
directors should provide the following disclosures that are
generally considered best-practice: significant related-party
transactions and any related-party relationships where control
exists; disclosure of the nature, type and elements of the
related-party transactions; and related-party relationships
where control exists (irrespective of whether there have been
transactions with parties under common control). The decision-
making process for approving related-party transactions should
also be disclosed. Members of the board and managers should
disclose any material interests in transactions or other matters
affecting the company.


A. Company Objectives

The objectives of the enterprise should be disclosed.

There are two general categories of company
objectives: the first is commercial objectives, such as
increasing productivity or identifying a sector focus; the second
is much more fundamental and relates to governance
objectives: it seeks to answer the basic question, "why does
the company exist?" This section refers to these governance
objectives. The objectives of enterprises may vary according to
the values of society. In many countries, but by no means all,
the primary corporate objective is to maximize the long-term
return to shareholders (shareholder value). This objective
appears in many codes throughout the world.

However, despite an increasing awareness throughout
the world that shareholder requirements must be met in order
to attract and retain long-term, low-cost capital, the emphasis
on shareholder value maximization has not precluded a
growing emphasis on other corporate objectives. Many codes
now include social, environmental and economic objectives as
part of the fundamental objectives of an enterprise. In
particular, the codes emphasize the need for enterprises to
address the interests of a range of stakeholders in order to
promote the long-term sustainability of the enterprise. If an
enterprise knowingly damages the interests of its stakeholders,
it can risk negatively affecting its own ability to produce long-
term shareholder value. This suggests that rather than viewing
shareholder value and stakeholder value as mutually exclusive
objectives, there are indications that the opposite is true, and
that the two objectives are probably interdependent in the long
run. This emphasis on a broader set of objectives can be found
in the Revised OECD Guidelines on Multinational Enterprises,
the 2004 edition of the OECD Principles of Corporate
Governance, proposed revisions of the UK Companies Act,
and the King II Report.

Guidance on Good Practices in Corporate Governance Disclosure


B. Ownership and Shareholder Rights

The beneficiary ownership structure should be fully
disclosed to all interested parties. Changes in the
shareholdings of substantial investors should be
disclosed to the market as soon as a company becomes
aware of them.

The beneficiary ownership structure of an enterprise is
of great importance in an investment decision, especially with
regard to the equitable treatment of shareholders. In order to
make an informed decision about the company, investors need
access to information regarding its ownership structure.

It is recommended that this disclosure includes the
concentration of shareholdings, for example the holdings of the
top twenty largest shareholders. This information is of particular
interest to minority shareholders. In some countries (e.g.
Germany) disclosure is required when certain thresholds of
ownership are passed.

Disclosure should be made of the control structure and of
how shareholders or other members of the organisation
can exercise their control rights through voting or other
means. Any arrangement under which some shareholders
may have a degree of control disproportionate to their
equity ownership, whether through differential voting
rights, appointment of directors or other mechanisms,
should be disclosed. Any specific structures or
procedures which are in place to protect the interests of
minority shareholders should be disclosed.

In certain cases, control is exercised indirectly via the
ownership of one or several entities that in turn (collectively)
control a corporation (i.e. a pyramid structure). In such cases,
the disclosure of ultimate control is considered best practice.

II. Non-Financial Disclosures


As noted in the OECD Principles, information about record
ownership may need to be complemented with information
about beneficial ownership, in order to identify potential
conflicts of interest, related-party transactions and insider
trading. In disclosing beneficial (or ultimate) ownership,
information should also be provided about shareholder
agreements, voting caps and cross-shareholdings, as well as
the rights of different classes of shares that the company may
have issued.

A company might have a single shareholder or group of
shareholders with majority control of the company, either
through holding the majority of the company’s outstanding
equity or through holding shares with superior voting rights. In
this situation, without safeguards for minority shareholders, the
latter group may be adversely affected. This issue is
emphasized by a number of codes, including the OECD

A number of international statements advocate a “one
share one vote” approach. Although the OECD Principles do
not advocate any particular view on the "one share one vote"
approach, the Principles include examples of other
international statements that do advocate a "one share one
vote" approach. The International Corporate Governance
Network, among others, is a strong supporter of this approach.
Advocates of the "one share one vote" approach view any
deviation from this approach as an undesirable distortion of the
connection between investment risk and the decision-making
process. However, actual practice might be different. For
example, in the European Union, many member States do
allow shares with multiple or no voting rights. While this
practice remains controversial, it may be tolerated by investors
as long as differentials in voting rights are disclosed. The
European Association of Securities Dealers does not support
such differentials but allows flexibility, noting that if they cannot

Guidance on Good Practices in Corporate Governance Disclosure


be avoided they should at least be indicated by a different
share class (EASD Principles, Recommendation II.2).

C. Changes in Control and Transactions Involving

Significant Assets

Rules and procedures governing the acquisition of
corporate control in the capital markets and extraordinary
transactions such as mergers and sales of substantial
portions of corporate assets should be disclosed.

Best practice suggests a substantial amount of pre-
control transaction disclosure, including the disclosure of the
intention to acquire control, and to take the company private,
and of associated squeeze-out/sell-out rights relevant for
minority shareholders. Other typical disclosures include the
identity of the bidder, past contacts, transactions and
agreements between the merging entities (or acquirer and
target, as the case may be), and a discussion of the
consequences of the control transaction for the shareholders of
the companies involved, as well as disclosure of the financial
situation of the bidder and its source of funds for the control
This disclosure should include any anti-takeover measures
established by the enterprise. It should also cover the
compensation policy for senior executives leaving the firm as a
result of a merger or acquisition.

Best practice disclosure for sales of substantial portions
of corporate assets include a notice to all shareholders (usually
at the annual general meeting), accompanied by an
independent evaluation report. In the Republic of Korea, for
example, the Corporations Code requires a special resolution
for a transaction that may result in the sale of a substantial part
of the enterprise. For such transactions involving listed
companies, additional disclosure and substantive requirements

II. Non-Financial Disclosures


are imposed. In South Africa, the Companies Act requires
approval of the shareholder meeting for sales of the whole or
the greater part of the company's assets, and for listed
companies such approval is required for any transaction over
30% of assets. In most governance systems, it is generally
considered good practice to submit questions of extraordinary
transactions (including mergers, acquisitions and takeovers) to
a general meeting for shareholder approval.

In the interest of protecting minority shareholders, the
principle of "equality of disclosure" should be practised,
such that all shareholders receive information equally.

Any information disclosed to one shareholder should
also be equally available to all shareholders (FEE, 2003a). This
reflects the view that all shareholders should have a right to be
equally informed, and complements the issue of simultaneous
disclosure of information discussed in section IV below. Major
shareholders such as institutional investors should not have
privileged access to information that is unavailable to minority

D. Governance Structures and Policies

The structure, role and functions of the board

The term "board" has different meanings in unitary and
two-tier systems. A unitary board is composed of executive and
non-executive directors. In a two-tier system the term “board” is
distinguished between the management board, whose
members have executive responsibilities, and the supervisory
board, responsible for the monitoring and supervision of the
company’s management. Variations exist among the two-tier
systems, and the responsibilities of the supervisory board could
in some countries include responsibilities for the strategic
direction of the company. While the two-tier system is not as

Guidance on Good Practices in Corporate Governance Disclosure


widely utilized as the one-tier system, it is nevertheless
prevalent in several large economies such as Austria, Germany
and the Netherlands. In this document, the term "board" is
used to refer to the highest governing and monitoring body or
bodies of an enterprise on which executive and non-executive
or supervisory board members sit. The recommendations
contained herein typically apply to both one-tier and two-tier

The composition of the board should be disclosed, in
particular the balance of executives and non-executive
directors, and whether any of the non-executives have any
affiliations (direct or indirect) with the company. Where
there might be issues that stakeholders might perceive as
challenging the independence of non-executive directors,
companies should disclose why those issues do not
impinge on the governance role of the non-executive
directors as a group.

One of the main issues in relation to the board structure
and its disclosure is that, regardless of which structure exists in
the company, independent leadership within the board is
ensured. Some countries would give more emphasis to the
need for a clear division of responsibilities between the
chairman and the chief executive officer (CEO) (Cadbury
Report, para. 4.9) Increasingly, codes mention that while a
combined CEO/Chair is tolerable (in a one-tier system), the
separation of the two is desirable and considered best practice,
as it helps to promote a balance of power within the leadership
structure. There is also increasing debate on the need for an
independent Chair of the board. Even within economies where
a combined role is still common, the accepted view is that
measures are called for to balance the power at the head of the
corporation such that no single individual has unfettered control
of the company (FEE, 2003a).

II. Non-Financial Disclosures


If the roles of chairman and CEO are combined, the
proportion of independent directors within the board structure
assumes greater importance. For example, the Cadbury Report
recommended that where the roles were combined, there
should be a strong independent element on the board and that
there should be a lead non-executive director to whom issues
regarding the executive management could be addressed. This
idea is followed by the Indian code and was also addressed in
the 2002 Report of the Kumar Mangalam Birla Committee on
Corporate Governance. The idea is also expressed in the
Malaysian Code on Corporate Governance (2000). However,
the definition of an independent director varies in different
countries. Therefore, a reference to a particular approach used
in defining director independence might be useful in disclosing
and discussing the board structure. FEE (2003a), for example,
recommends that a principles-based approach used for
assessing the independence of external auditors (see section
H below) can also be usefully applied to the assessment of
independence among non-executive (supervisory) directors. A
crucial general principle in this respect is the principle of self-
interest threat; a self-interest threat occurs when a director
could benefit from a financial or other interest in the enterprise,
as a result of unethical behaviour or lack of independence
(FEE, 2003b). FEE further recommends that the board should
disclose its reasons for considering a non-executive (or
supervisory) director to be independent.

It is recognized that not all non-executive directors can
be considered independent directors. The Narayan Murty
Committee Report in India, for instance, makes a clear
distinction between non-executive and independent directors.
For example, non-executive directors who are employees of
banks and other financial institutions with which the enterprise
has a business relationship cannot be considered independent.
Similarly, for the boards of subsidiary companies, it is not
uncommon for non-executive directors to be employees of the

Guidance on Good Practices in Corporate Governance Disclosure


parent firm or some other subsidiary related to the parent firm.
Any relationship of directors to the parent firm or its
subsidiaries should therefore be disclosed. Such a relationship
could be considered in assessing the ability of the non-
executive director to fulfil his or her duties.

The board’s role and functions must be fully disclosed.

Most guidelines and codes of best practice emphasize
the stewardship and supervision functions of the board and
distinguish its responsibilities from those of management. It is
important that directors disclose what their functions and
retained powers are, otherwise they may be considered
accountable for all matters connected with the enterprise. In
many Commonwealth countries, for example, the Companies
Act makes the directors accountable for the "management" of
the company, but also allows them to delegate; hence the
importance of recording and disclosing the retained powers of
the directors, along with a clear statement about which powers
are delegated to the CEO. However, there are differences in
the specificity with which the board’s role is explained. For
example, the Dey Report (Canada), the Vienot Report
(France), the Korean Stock Exchange Code, Malaysia’s Report
on Corporate Governance, Mexico’s Code of Corporate
Governance and the King II Report (South Africa) specify board
functions as strategic planning, risk identification and
management selection, oversight and compensation of senior
management, succession planning, communications with
shareholders, integrity of financial controls and general legal
compliance. In India, for example, a director's responsibility
statement outlining the board's responsibilities on compliance
with standards, internal controls, risk management, fraud
detection and other matters, is a disclosure requirement under
both the law and stock exchange rules. The degree of
differences between codes may reflect the degree to which
company law or listing standards specify board responsibilities.

II. Non-Financial Disclosures


Board committees

It has become a common practice for boards to
establish board committees to facilitate fulfilment of certain of
the board’s functions and address some potential conflicts of
interest. The use of board committees is, among other things,
intended to enhance independent judgement on matters in
which there is potential for conflict of interest, and to bring
special expertise in areas such as audit, risk management,
election of board members and executive remuneration. While
it may be advisable for the preparatory work of certain key
board functions to be assigned to separate committees, there
is an international consensus that the full board holds collective
and final responsibility (FEE, 2003a).

Governance structures should be disclosed. In particular,
the board should disclose structures put in place to
prevent conflicts between the interests of the directors
and management on the one side, and those of
shareholders and other stakeholders on the other.

These structures may include committees or groups to
which the board has assigned duties regarding the oversight of
executive remuneration, audit matters, appointments to the
board, and the evaluation of management performance.

The composition and functions of any such groups or
committees should be fully disclosed. Committee charters,
terms of reference or other company documents outlining
the duties and powers of the committee or its members
should also be disclosed, including whether or not the
committee is empowered to make decisions which bind
the board, or whether the committee can only make
recommendations to the board. Where any director has
taken on a specific role for the board or within one of
these structures, this should be disclosed.

Guidance on Good Practices in Corporate Governance Disclosure


Internationally, there has been consensus that although
a board has collective and final responsibility, the use of
committees for the preparatory work of certain key board
functions is advisable. This is especially true where executives
may find themselves facing conflicts of interest, for example in
the areas of audits, remuneration and director nomination. A
number of codes address this issue, also outlining the need for
clear terms of reference for such committees (e.g. Australia,
India, Malaysia, South Africa).

As a general rule, codes have recommended, and in
some cases stock exchange regulations require, that some
board committees be substantially or exclusively staffed by
non-executive or outside directors, particularly independent
directors, and especially with regard to the committee
chairpersons. Disclosures that are becoming increasingly
common include the disclosure of committee charters or terms
of reference, committee chairs, reports on activities (in
particular those of the audit committee), composition,
nominations committee disclosure on whether use is made of
external advisers/advertising to find new directors (as opposed
to potentially conflicting informal connections), and the
effectiveness of executive remuneration in providing incentives
for executives.

Ethics policy and support structure

The existence of an enterprise code of ethics and any
governance structure put in place to support that code of
ethics should be disclosed. Any waivers to the code of
ethics or the rules governing ethics procedures should
also be disclosed.

Ethics management is important for the promotion of
good business practices, transparency and risk reduction. As
ethics management becomes more common in enterprises, the

II. Non-Financial Disclosures


existence of its key structural features is an important area of
disclosure. It is noted that, with the exception of some countries
such as the United States, no general or international best
practice has yet been established in this area. Nevertheless,
some possible features subject to disclosure might include: the
existence of a senior ethics officer and that person’s
responsibilities; the existence of an ethics committee and its
relationship to the board; policies for breaches of the ethics
code, including reporting mechanisms and "whistleblower"
protection mechanisms; and policies on the dissemination and
promotion of the ethics code.

E. Members of the Board and Key Executives

1. Duties and qualifications

The number, type and duties of board positions held by an
individual director should be disclosed. An enterprise
should also disclose the actual board positions held, and
whether or not the enterprise has a policy limiting the
number of board positions any one director can hold.

Shareholders need to be aware of the number, type
and duties of outside board and management positions that
any individual director holds. Information on outside board and
management positions should be disclosed for key executives
as well. The purpose of this information is to make a judgement
on the ability of directors and key executives to meet all of their
commitments; thus the number as well as the type and duties
of the position (which gives some indication of the commitment
involved) should be disclosed.

Many codes and institutional investors have specified
disclosure requirements (and/or actual limitations) on the
number and type of positions held by directors. Among others,
such disclosure requirements can be found in the positions of

Guidance on Good Practices in Corporate Governance Disclosure


the FEE and the Winter Group Report, the Dey Report, the
Indian Code, the Malaysian Code, the King II Report and the
National Association of Pension Funds in the UK. Some
guidance, such as the report of the FEE, also recommends
disclosure of positions held in public or not-for-profit

There should be sufficient disclosure of the qualifications
and biographical information of all board members to
assure shareholders and other stakeholders that the
members can effectively fulfil their responsibilities. There
should also be disclosure of the mechanisms which are in
place to act as “checks and balances” on key individuals
in the enterprise.

Most governance guidelines and codes of best practice
address topics related to directors’ qualifications and board
membership criteria. These may include experience, personal
characteristics, core competencies, availability, diversity, age,
specific skills (e.g. the understanding of particular
technologies), international background, and so on. The
CACG, for example, indicates that the director has to have
integrity, common sense, business acumen and leadership.
Some codes specifically require financial literacy (e.g. the
National Association of Corporate Directors in the United
States) or knowledge of business and financial technology (e.g.
the Brazilian Institute of Corporate Governance).

There should be disclosure of the types of development
and training that directors undergo at induction as well as
the actual training directors received during the reporting

Recently, some countries have started to require
specific training for directors. For example, in India, the
Companies (Amendment) Bill 2003 makes director training

II. Non-Financial Disclosures


mandatory. The Naresh Chandra Committee on Corporate
Audit and Governance, also of India, recommends training for
independent directors and disclosure thereof.

The board should disclose facilities which may exist to
provide members with professional advice. The board
should also disclose whether that facility has been used
during the reporting period.

On certain legal and financial matters, directors might
discharge their duties more effectively if allowed access to
independent external advisers, for example legal and financial
experts. If used correctly, access to external expertise can
enhance the ability of directors to fulfil their duties properly. In
New Zealand, for example, it is considered vital for directors to
have access to independent advice, and therefore this principle
is stated in that country's Companies Act. The Merged Code in
Belgium also points out the need for an agreed procedure for
using external expertise, a point also mentioned in the Dey
Report (Canada), and the Vienot (France), Mertanzis (Greece)
and Olivencia (Spain) reports. Best practice suggests that
whatever approach is used, the approach should be disclosed.

2. Evaluation mechanism

The board should disclose whether it has a performance
evaluation process in place, either for the board as a
whole or for individual members. Disclosure should be
made of how the board has evaluated its performance and
how the results of the appraisal are being used.

Along with the duties and responsibilities of directors,
shareholders will need to know how directors were evaluated,
what criteria were used and how they were applied in practice,
particularly with reference to remuneration.

Guidance on Good Practices in Corporate Governance Disclosure


CACG Guidelines stress that evaluations should be
based on objective criteria. The IAIM Guidelines (Ireland) and
Preda Code (Italy) leave to the remuneration committee the
selection of appropriate criteria and the establishment of
whether these criteria have been met.

An important aspect of performance is the attendance
of directors at board and committee meetings. Specific
requirements regarding disclosure of the frequency and
procedures of board meetings can be found, for example, in
the Indian Code, the King II Report and the Combined Code of
the United Kingdom.

3. Directors’ remuneration

Directors should disclose the mechanism for setting
directors’ remuneration and its structure. A clear
distinction should be made between remuneration
mechanisms for executive directors and non-executive
directors. Disclosure should be comprehensive to
demonstrate to shareholders and other stakeholders
whether remuneration is tied to the company’s long-term
performance as measured by recognized criteria.
Information regarding compensation packages should
include salary, bonuses, pensions, share payments and all
other benefits, financial or otherwise, as well as
reimbursed expenses. Where share options for directors
are used as incentives but are not disclosed as
disaggregated expenses in the accounts, their cost should
be fully disclosed using a widely accepted pricing model.

The current level of disclosure relating to directors’
remuneration varies widely. However, the trend appears to be
towards greater levels of disclosure in this area, especially in
Europe: France, Germany, Luxembourg, the Netherlands,
Switzerland and the United Kingdom have all introduced laws

II. Non-Financial Disclosures


to enforce the disclosure of directors' individual remuneration.
In the United Kingdom, for example, the report of the
company’s remuneration committee must identify each director
and specify his or her total compensation package, including
share options. Recently added regulations also require
companies to put their remuneration report to a shareholder
vote at each annual general meeting. Elsewhere in the world
there are other examples of this practice. The Indian Code, for
instance, requires disclosure about remuneration in a section of
the annual report on corporate governance, in addition to
suitable disclosure on directors' remuneration in the profit and
loss statement.

The length of directors’ contracts and the termination of
service notice requirements, as well as the nature of
compensation payable to any director for cancellation of
service contract, should be disclosed. A specific reference
should be made to any special arrangement relating to
severance payments to directors in the event of a

4. Succession planning

The board should disclose whether it has established a
succession plan for key executives and other board
members to ensure that there is a strategy for continuity of

OECD Principle IV.D.2 stresses that overseeing
succession planning is a key function of the board, while the
Dey Report (Canada) considers it an important stewardship
duty of the company, and the Vienot Report I (France)
recommends that the selection committee be prepared to
propose successors at short notice. While specific details
regarding potential successors might be the subject of
confidentiality, the existence of a procedure and a

Guidance on Good Practices in Corporate Governance Disclosure


preparedness to appoint successors as necessary is not
confidential, and should be the subject of disclosure.

5. Conflict of interest

Conflicts of interest affecting members of the board
should, if they are not avoidable, at least be disclosed. The
board of directors should disclose whether it has a formal
procedure for addressing such situations, as well as the
hierarchy of obligations to which directors are subject.

Conflicts of interest are required to be disclosed by law
in many countries. The critical issue is that all conflicts of
interest should be disclosed, along with what the board decided
to do regarding the specific situation and the relevant director

F. Material Issues Regarding Stakeholders, and

Environmental and Social Stewardship

The board should disclose whether there is a mechanism
protecting the rights of other stakeholders in a business.

OECD Principle IV concerns itself with ensuring that
the rights of stakeholders protected by law are respected. Even
where no legislation exists, it is considered good practice to
make additional commitments, as corporate reputation and
performance may require recognition of broader interests. For
example, the CACG Guidelines require that a board identify the
corporation’s internal and external stakeholders and agree on a
policy for how the corporation should relate to them.

II. Non-Financial Disclosures


The role of employees in corporate governance should be

Among member States of the European Union, for
example, various practices exist where employees elect some
of the supervisory directors, can be given a right to nominate
one or more directors or can have an advisory voice on certain
issues discussed by the board. This practice is considered by
some to dilute the influence of shareholders, and to be a
distortion of the connection between investment risk and the
decision-making process. Others consider the strong interest of
employees in the enterprise to warrant their special status in
the governance process, and view employee involvement as
having a beneficial effect on the overall sustainability of the
firm. Regardless of one's views, any mechanisms for employee
involvement in the governance of the enterprise should be
clearly disclosed.

The board should disclose its policy and performance in
connection with environmental and social responsibility
and the impact of this policy and performance on the
firm’s sustainability.

The environmental dimension of this issue was
addressed by ISAR in its agreed conclusions on Accounting
and Financial Reporting for Environmental Costs and
Liabilities. ISAR noted that an enterprise’s environmental
performance could affect its financial health and hence its
sustainability. At its twentieth session, ISAR concluded that the
pressure for better reporting on social issues was increasing
and that enterprises were producing more information on this
topic. Among others, the King II Report (South Africa), the
Association of British Insurers (UK) in its Disclosure Guidelines
on Socially Responsible Investment, and the guidelines of the
Global Reporting Initiative encourage disclosure of governance
mechanisms in place to support improvement of social and

Guidance on Good Practices in Corporate Governance Disclosure


environmental performance. Such governance disclosure is
also relevant for creators of "socially responsible investing"
indexes, such as the Domini 400 Social Index produced by
KLD Research & Analystics in the United States, the
FTSE4GOOD produced by FTSE in the United Kingdom, or the
Dow Jones Sustainability Worlds Indexes (DJSI) produced by
the SAM Group of Switzerland in conjunction with Dow Jones
Ltd and STOXXX Ltd.

G. Material Foreseeable Risk Factors

The board should give appropriate disclosures and
assurance regarding its risk management objectives,
systems and activities. The board should disclose existing
provisions for identifying and managing the effects of risk-
bearing activities. The board should report on internal
control systems designed to mitigate risks. Such reporting
should include risk identification mechanisms.

In recent years, much attention has been paid to the
role of the board in risk assessment or management and
internal controls designed to mitigate risk. This issue is
emphasized in most codes and principles, including the OECD
Principles, the CACG Guidelines, King II and the United
Kingdom's Combined Code.

Users of financial information and participants in the
marketplace need information on foreseeable material risks,
including risks specific to industries or geographical areas,
dependence on certain commodities, financial market risk and
derivative risks. The corporate governance structures in place
to assess, manage and report on these types of risks should be
the subject of corporate governance disclosure.

II. Non-Financial Disclosures


H. Independence of External Auditors

The board should disclose that it has confidence that the
external auditors are independent and their competency
and integrity have not been compromised in any way. The
process for the appointment of and interaction with
external auditors should be disclosed.

Independent external audits should provide an
objective assurance that the financial statements present a true
and fair view (or are presented fairly in all material respects) of
the financial condition and performance of the audited entity.
Therefore, most governance codes and guidelines define
procedures for enhancing the independence, objectivity and
professionalism of the external audit. A number of approaches
regarding the external audit, such as the need for audit partner
rotation and the avoidance of possible conflicts of interest
involved in providing non-audit services, can be considered to
ensure that external audits serve shareholder and other
stakeholder interests in the intended manner.

Auditor independence is a prerequisite for the reliability
and credibility of the audit of financial statements. Adopting a
principles-based approach to auditor independence (as set out
in the EC’s 2002 recommendation on auditor independence
and in the IFAC Code of Ethics) is valued for its adaptability to
new practices. The principles-based approach sets out the
fundamental principles which must always be observed by the
auditor and considers the threats and safeguards (including
restrictions and prohibitions) to be in place to ensure the
auditors’ independence and objectivity. However, it could be
useful for enterprises to disclose a substantial definition of
those activities that would be regarded as non-audit-related,
especially in those cases where audit and non-audit-related
fees are not subject to mandatory disclosure.

Guidance on Good Practices in Corporate Governance Disclosure


Disclosures should cover the selection and approval
process for the external auditor, any prescriptive
requirements of audit partner rotation, the duration of the
current auditor (e.g. whether the same auditor has been
engaged for more than five years and whether there is a
rotation of audit partners), who governs the relationship
with the auditor, whether auditors do any non-audit work
and what percentage of the total fees paid to the auditor
involves non-audit work.

The audit committee should play a role in establishing a
policy on purchasing non-audit services from the external
auditor; this policy should be disclosed along with an
explanation or assessment of how this policy sufficiently
ensures the independence of the external auditor (FEE,

I. Internal Audit Function

Enterprises should disclose the scope of work and
responsibilities of the internal audit function and the
highest level within the leadership of the enterprise to
which the internal audit function reports. Enterprises with
no internal audit function should disclose the reasons for
its absence.

An effective internal audit function plays a significant
role within the corporate governance framework of a company.
The scope of work and responsibilities of an internal audit
function are often determined by the board (or management
board in a two-tier system), typically in conjunction with the
audit committee, and can vary significantly depending on the
size, structure and complexity of the company and the
resources allocated. Given the potential variation in the internal
audit function among enterprises, it is recommended that
details of this function be disclosed.


Disclosure should be made of the process for holding and
voting at annual general meetings and extraordinary
general meetings, as well as all other information
necessary for shareholders to participate effectively in
such meetings. Notification of the agenda and proposed
resolutions should be made in a timely fashion, and be
made available in the national language (or one of the
official languages) of the enterprise as well as, if
appropriate, an internationally used business language.
The results of a general meeting should be communicated
to all shareholders as soon as possible.

The OECD Principles outline a general consensus as
to the nature of shareholder meetings and the requirement to
make shareholder participation as simple and effective as
possible and ensure the equitable treatment of all
shareholders. The Principles state that shareholders should be
informed of the rules and be furnished with information
regarding the date, location and agenda of the meeting as well
as the issues to be decided. Sufficient information should be
provided so that shareholders can make fully informed
decisions. Enterprises should do everything possible to
facilitate the effective participation of all (including foreign)
shareholders in general meetings.

In most governance systems, it is either required or
considered good practice to put certain issues to shareholder
approval at a general meeting. Best practice in this area entails
that issues subject to shareholder approval be presented
individually and unbundled, allowing shareholders to accurately
exercise their voting rights. These rules can vary across
different countries, and therefore disclosing information on the
subject would be useful, especially for foreign investors.

In some countries, for some enterprises, new types of
voting technology are being employed, for example Internet
voting. The enterprise should, when issuing notice of the

Guidance on Good Practices in Corporate Governance Disclosure


meeting, disclose the relevant details of voting technologies

The enterprise should disclose all relevant information on
the process by which shareholders can submit agenda
items, and should disclose which shareholder proposals
(if any) were excluded from the agenda and why.

It is considered good practice in most governance
systems to allow shareholders to include items on the agenda
of a general meeting.


All material issues relating to corporate governance of the
enterprise should be disclosed in a timely fashion. The
disclosure should be clear, concise, precise and governed
by the “substance over form” principle.

Some issues may require continuous disclosure.
Relevant information should be available for users in a cost-
effective way, preferably through the websites of the relevant
government authority, the stock exchange on which the
enterprise is listed (if applicable) and the enterprise itself.

The location of corporate governance disclosures
within the annual report is not generally defined and can vary
substantially in practice. Some degree of harmonization of the
location of corporate governance disclosures would be
desirable to make the relevant data more accessible. Two
possible approaches include putting all corporate governance
disclosures in a separate section of the annual report, or in a
stand-alone corporate governance report. Examples of the
former approach are found in the recommendations of the
Hong Kong Society of Accountants and the listing requirements
in India and Switzerland, which provide for corporate
governance disclosures to appear in a separate section of the
annual report and in a prescribed format. Where corporate
governance disclosures are not consolidated, there should be
sufficient cross-referencing to different disclosures to improve
access to the information.

Some information related to corporate governance may
require immediate disclosure, and some codes and listing
requirements address this issue. For example, in Malaysia
listing requirements call for immediate disclosure of a change
in the management, external auditor or board structure.
Traditional channels of communication with stakeholders,
such as annual reports, should be supported by other
channels of communication, taking into account the
complexity and globalization of financial markets and the
impact of technology.

Guidance on Good Practices in Corporate Governance Disclosure


The OECD Principles state that the Internet and other

information technologies provide the opportunity for improving
information dissemination. In some countries (e.g. the United
States), Internet disclosure is now accepted as legal disclosure
and annual reports must indicate where company information
can be found on the Internet. The King II Report also
emphasizes the need for critical financial information to be
made available to shareholders simultaneously and supports
the idea that traditional channels of communication be
complemented by new means, such as the Internet.

Whatever disclosures are made and whatever channels
used, a clear distinction should be made between audited and
unaudited financial information, and means of validation of
other non-financial information should be provided.


Where there is a local code on corporate governance,
enterprises should follow a “comply or explain” rule
whereby they disclose the extent to which they followed
the local code’s recommendations and explain any
deviations. Where there is no local code on corporate
governance, companies should follow recognized
international good practices.

The use of “comply or explain” mechanisms in many
countries allows investors and other stakeholders greater
access to information about the corporation and is to be
encouraged. In relation to this “comply or explain” rule, some
countries now require companies with foreign listings to
disclose the extent to which the local governance practices
differ from the foreign listing standards.

The enterprise should disclose awards or accolades for its
good corporate governance practices.

It is recognized that there is an increase in the number of
corporate governance accolades, awards, ratings, rankings
and even corporate governance stock market indexes where
constituents are selected on the basis of exhibiting good
practices in corporate governance. Especially where such
awards or recognitions come from major rating agencies, stock
exchanges or other significant financial institutions, disclosure
would prove useful since it provides independent evidence of
the state of a company's corporate governance.


International organizations

CACG (2003). Corporate Governance Principles for Annual

Reporting in the Commonwealth. Commonwealth Association
of Corporate Governance.

EASD (2000). Corporate Governance: Principles and

Recommendations. European Association of Securities

EC (2002a). Comparative Study of Corporate Governance Codes

to the European Union and Member States. European
Commission, Internal Market Directorate General.

_______ (2002b). Report of the High Level Group of Company

Law Experts on a Modern Regulatory Framework for
Company Law in Europe, (a.k.a. "The Winter Group Report").
European Commission. November.

_______ (2002c). Recommendation on statutory auditors'

independence in the EU. European Commission. May.

_______ (2004). Directive on minimum transparency

requirements for listed companies. European Commission.

Euroshareholders (2000). Euroshareholders Corporate

Governance Guidelines.

FEE (2003a). Discussion Paper on the Financial Reporting and

Auditing Aspects of Corporate Governance. European
Federation of Accountants.

_______ (2003b). Conceptual Approach to Safeguarding

Integrity, Objectivity and Independence Throughout the
Financial Reporting Chain. European Federation of

_______ (2004). Study on Mandatory Rotation of Audit Firms.

European Federation of Accountants.

Guidance on Good Practices in Corporate Governance Disclosure


_______ (2005). Discussion Paper on Risk Management and
Internal Control in the EU. European Federation of

GRI (2002) Sustainability Reporting Guidelines. Global Reporting


IASB (2005). Framework for the Preparation and Presentation of

Financial Statements. International Accounting Standards

ICGN (1999). Statement on Global Corporate Governance

Principles. International Corporate Governance Network.

_______ (2005). Revised Statement on Global Corporate

Governance Principles. International Corporate Governance

IOSCO (2002). Principles of Auditor Independence and the Role

of Corporate Governance in Monitoring an Auditor's
Independence. International Organisation of Securities

ISAR (1989). Conclusions on Disclosure Requirements

Concerning the Annual Report of the Board of Directors
(E/C.10/AC.3/1989/6). Intergovernmental Working Group of
Experts on International Standards of Accounting and

OECD (1999). Principles of Corporate Governance. Organisation

for Economic Co-operation and Development.

_______ (2000). Revised Guidelines for Multinational Enterprises.

Organisation for Economic Co-operation and Development.

_______ (2004). Principles of Corporate Governance (2004

Edition). Organisation for Economic Co-operation and

Annex I: References


UNCTAD (1999). Accounting and Financial Reporting for
Environmental Costs and Liabilities (UNCTAD/ITE/EDS/4).
United Nations Conference on Trade and Development.

_______ (2000). Integrating Environmental and Financial

Performance at the Enterprise Level (UNCTAD/ITE/TED/1).
United Nations Conference on Trade and Development.

World Bank (2000). Corporate Governance ROSC for Malaysia.

_______ (2002). The State of Corporate Governance: Experience

from country assessments, Mierta Capaul and Olivier
Fremond, Policy Research Working Paper.

_______ (2003a). Corporate Governance ROSC for Hong Kong.

_______ (2003b). Corporate Governance ROSC for Korea.

_______ (2003c). Corporate Governance ROSC for Mexico.

_______ (2003d). Corporate Governance ROSC for South Africa.

_______ (2003e). Accounting and Auditing ROSC for South


_______ (2004a). Implementation of International Accounting and

Auditing Standards: Lessons Learned from the World Bank’s
Accounting and Auditing ROSC Program. Hegarty, Gielen
and Hirata Barros, World Bank.

_______ (2004b). Corporate Governance ROSC for India.

_______ (2004c). Accounting and Auditing ROSC for India.

_______ (2004d). Accounting and Auditing ROSC for Mexico.

Guidance on Good Practices in Corporate Governance Disclosure


Working Group representing the Australian Institute of Company

Directors, the Australian Society of Certified Practicing
Accountants, the Business Council of Australia Law Council
of Australia, the Institute of Chartered Accountants in
Australia and the Securities Institute of Australia (1995).
Bosch Report: Corporate Practices and Conduct.

Brussels Stock Exchange (1998). Report of the Belgium

Commission on Corporate Governance (Cardon Report).

Brussels Stock Exchange Banking and Finance Commission

(1998). Corporate Governance for Belgian Listed Companies
(Merged Code).

Corporate Governance Committee (2004). The Belgian Code on

Corporate Governance ("Lippens Code")

Instituto Brasileiro de Governança Corporativa (Brazilian Institute

of Corporate Governance) (2001). Code of Best Practice of
Corporate Governance.

Toronto Stock Exchange Committee on Corporate Governance in

Canada (1994). Where Were the Directors? Guidelines for
Improved Corporate Governance in Canada (Dey Report).

China, Hong Kong (SAR)
The Stock Exchange of Hong Kong (2000). Code of Best Practice.

Hong Kong Society of Accountants (2001) Corporate Governance

Disclosure in Annual Reports: A Guide to Current
Requirements and Recommendations for Enhancement.

Association Française des Entreprises Privées, Association des

Grandes Entreprises Françaises, and Mouvement des
Entreprises de France (2002). Promoting Better Corporate

Annex I: References


Governance in Listed Companies (Daniel Bouton

Association Française des Entreprises Privées and Mouvement

des Entreprises de France (1999). Report on the Committee
on Corporate Governance (Vienot II).

Association Française de la Gestion Financière – Association des

Sociétés et Fonds Français d’Investissement (1998).
Recommendations on Corporate Governance (Hellebuyck
Commission Recommendations).

Conseil National du Patronat Français and Association Française

des Entreprises Privées (1995). The Board of Directors of
Listed Companies in France, (Vienot I).

Berliner Initiativkreis (Berlin Initiative Group) (2000). German Code

for Corporate Governance.

Government Commission on the German Corporate Governance

Code (2005). The German Corporate Governance Code
("'Cromme Code")

Grundsatzkommission Corporate Governance (German Panel for

Corporate Governance) (2000). Corporate Governance Rules
for German Quoted Companies.

Capital Market Commission’s Committee on Corporate

Governance in Greece (1999). Principles on Corporate
Governance in Greece: Recommendations for Its Competitive
Transformation (Mertzanis Report).

Confederation of Indian Industry (1998). Desirable Corporate

Governance – A Code.

Committee Appointed by the SEBI on Corporate Governance

under Chairmanship of Shri Kumar Mangalam Birla (2002)

Guidance on Good Practices in Corporate Governance Disclosure


Report of the Kumar Mangalam Birla Committee on
Corporate Governance.

Irish Association of Investment Managers (1999). Corporate

Governance, Share Options and Other Incentive Scheme

Comitato per la Corporate Governance delle Società Quotate

(Committee for the Corporate Governance of Listed
Companies) (1999). Report and Code of Conduct (Preda

Ministry of the Italian Treasury (1997). Report of the Draghi


Korea (ROK)
Committee on Corporate Governance (1999). Code of Best

Practice for Corporate Governance.

Prime Minister’s Office of the Kyrgyz Republic (1997). Department

of Economic Sectors Development, Model Charter of a
Shareholding Society of Open Type.

JPK Working Group I on Corporate Governance in Malaysia

(2000). Report on Corporate Governance in Malaysia.

Finance Committee on Corporate Governance (2000). Malaysian

Code on Corporate Governance.

Kuala Lumpur Stock Exchange Listing Requirements as of

January 2005.

Consejo Coordinador Empresarial and La Comisión Nacional

Bancaria y de Valores (1999). Código de Mejores Práticas.

Annex I: References


Committee on Corporate Governance (1997). Corporate

Governance in the Netherlands – Forty Recommendations
(Peters Code).

South Africa
Institute of Directors in Southern Africa (1994). The King I Report

on Corporate Governance.

Institute of Directors in Southern Africa (2002). The King II Report

on Corporate Governance.

Comisión Especial para el Estudio de un Código Etico de los

Consejos de Administración de las Sociedades (1998). El
Gobierno de las Sociedades Cotizadas (Olivencia Report).

SWX Swiss Exchange (2002). Directive on Information Relating

to Corporate Governance.

The Stock Exchange of Thailand (1998). The Roles, Duties and

Responsibilities of the Directors of Listed Companies.

United Kingdom
Association of British Insurers (2001). Disclosure Guidelines on

Socially Responsible Investment.

Cadbury Commission (1992). Report of the Committee on the

Financial Aspects of Corporate Governance (Cadbury

Department of Trade and Industry (2003). The Operating and

Financial Review Working Group on Materiality.

Institute of Chartered Accountants in England and Wales (1999).

Internal Control: Guidance for Directors on the Combined
Code (Turnbull Report).

Guidance on Good Practices in Corporate Governance Disclosure


Institute of Chartered Secretaries and Administrators (1996)
Electronic Communications with Shareholders.

London Stock Exchange Committee on Corporate Governance

(1998). The Combined Code: Principles of Good Governance
and Code of Best Practice.

National Association of Pension Funds (1999). Corporate

Governance Pocket Manual.

United States
Conference Board (2003). Findings and Recommendations. The

Conference Board Commission on Public Trust and Private

General Motors Board of Directors (2000). GM Board of Directors

Corporate Governance Guidelines on Significant Corporate
Governance Issues.

National Association of Corporate Directors (2000). Report of the

NACD Blue Ribbon Commission on Performance Evaluation
of Chief Executive Officers, Board and Directors.

NACD (1999). Report and Recommendations of the Blue Ribbon

Committee on Improving the Effectiveness of Corporate Audit

Sarbanes-Oxley Act (2002).

Other Literature
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Private Property. New York, Macmillan.

Frederick, R (2004). "The Role of the Board in Disclosure: An

Examination of What Codification Efforts Say". Paper prepared
for the South-Eastern Europe Corporate Governance
Roundtable on Transparency and Disclosure: Implementation
and Enforcement, sponsored by the OECD.

Annex I: References


Gomez S (2002). Examples of corporate governance in Spain.
Working paper, University of Oviedo, Spain.

Gordon, JN (2005). "Executive Compensation: If There's a Problem,

What's the Remedy? The Case for 'Compensation Disclosure
and Analysis' ", Columbia Law School and European Corporate
Governance Institute (ECGI).

Gregory, HJ and Weil, Gotshal & Manges, LLP (2000). "International

Comparison of Corporate Governance Guidelines and Codes of
Best Practices: Investor Viewpoints".

Gregory, HJ and Weil, Gotshal & Manges, LLP (2001a).

"International Comparison of Corporate Governance Guidelines
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