Template-type: ReDIF-Paper 1.0
Author-Name: Antonio Capobianco
Author-Workplace-Name: OECD
Author-Name: Hans Christiansen
Author-Workplace-Name: OECD
Title: Competitive Neutrality and State-Owned Enterprises: Challenges and Policy Options
Abstract: Competitive neutrality implies that no business entity is advantaged (or disadvantaged) solely because of its ownership. The Paper argues that far from all SOEs have the opportunity or the incentives to act in an anti-competitive way, and a trend in recent decades toward more fully corporatised and commercially operating SOEs has no doubt improved overall efficiency. However, problems remain, not least in the network industries where many remaining SOEs are market incumbents that continue to enjoy monopolies in part of their value chains or government subsidies, purportedly in compensation for public service obligations. Renewed concerns about competitive neutrality have also arisen from the market entry of SOEs domiciled in countries where the process of corporatisation has yet to run its full course.To counter these problems some OECD countries as well as the European Union have established specific competitive neutrality frameworks. These frameworks go beyond addressing the anti-competitive behaviour of SOEs, to also establish mechanisms to identify and eliminate such competitive advantages as they may have, including with respect to taxation, financing costs and regulatory neutrality. The experience so far with such formal arrangements is generally encouraging. Jurisdictions that have them have generally been successful in rolling back state subsidies and, on the evidence to date, have obtained significant economic efficiency gains.The Working Paper concludes that a full implementation of the OECD Guidelines on Corporate Governance of State-Owned Enterprises would go a long way in ensuring competitive neutrality. The business activities of currently unincorporated segments of the government sector would become much more competitive and accountable if they were made subject to the Guidelines. For incorporated SOEs the Guidelines also include a portmanteau recommendation of a “level playing field”. However, they offer only limited concrete recommendations on how governments are expected to obtain this outcome in practice. The Guidelines are moreover weakly implemented in a number of countries.
Classification-JEL: G3; G34
Keywords: competitive advantages, competitive neutrality, corporate governance, corporate neutrality, state-owned enterprises
Creation-Date: 2011-05-01
Number: 1
Handle: RePEc:oec:dafaae:1-EN

Template-type: ReDIF-Paper 1.0
Author-Name: W. Richard Frederick
Title: Enhancing the Role of the Boards of Directors of State-Owned Enterprises
Abstract: This Working Paper summarises the main findings of an interview exercise that was conducted with the Chairs and other key board members in state-owned enterprises (SOEs) owned by OECD member governments. The work was part of an ongoing exercise in developing OECD best practices for organising SOE boards.The interviews confirmed that reforming the functioning of SOE boards is seen as a top priority in many countries due to continued pressure to increase SOE performance. Even where SOE performance is good or equivalent to the private sector, governments seek to better performance by further adjusting governance practices. A key strategy has been to provide boards with greater powers and the autonomy to exercise their powers; enhance board composition to ensure they have the necessary skills to achieve their goals; and ensuring the independence of board members including by shielding them from political intervention.It appears that in SOE governance, the private sector usually defines the best practice standard. It is almost uniform practice for governments to seek to improve performance by emulating private sector practices. Important national differences in SOE board practices were, however, detected. One example concerns decision making rights such as, for example, the right of the board to appoint the CEO. Increasingly, what appears to distinguish best practice from less good practice, is not legal rights, but rather the manner in which the government influences the course of SOEs.The Working Paper concludes that the key success factors for the public ownership function in enhancing SOE boards include a shared vision for the governance reforms that are to be achieved; clearly communicated policies and objectives to SOEs; abstaining from ad-hoc interventions in SOEs once their objectives have been defined; well-designed training programmes for board members as well as the government ownership representatives; enhanced channels of communications between CEOs, boards and the ownership function; and increased transparency around the conduct of SOE boards, management and the government ownership function.
Classification-JEL: G3; G34
Keywords: board of directors, corporate governance, governance reform, state-owned enterprises
Creation-Date: 2011-05-01
Number: 2
Handle: RePEc:oec:dafaae:2-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Paul Hewitt
Author-Workplace-Name: Manifest Information Services
Title: The Exercise of Shareholder Rights: Country Comparison of Turnout and Dissent
Abstract: The scope of this research is to examine the degree to which investors use their share voting rights to register their concerns with companies on corporate issues. Analysis has been hindered by poor disclosure by companies of turnout figures and more nuanced reporting of resolution outcomes (e.g. disclosing withheld votes). A country comparison which includes OECD countries and Brazil highlights patterns of dissent that suggest remuneration and issues of capital structure are the resolutions that attract most consistent shareholder dissent. Australia, Chile and Germany are singled out for enhanced analysis. The study points to the need for further research at the investor and issuer level about the role of voting in the engagement process and the barriers to the effectiveness and transparency of voting.
Classification-JEL: G30; G34
Keywords: corporate governance, remuneration, shareholder rights, shareholder voting
Creation-Date: 2011-08-01
Number: 3
Handle: RePEc:oec:dafaae:3-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Matthew Rennie
Author-Name: Fiona Lindsay
Title: Competitive Neutrality and State-Owned Enterprises in Australia: Review of Practices and their Relevance for Other Countries
Abstract: This working paper provides a comprehensive overview of the competitive neutrality framework of the Australian Commonwealth as well as individual States. It reviews the history behind the framework and provides examples of cases brought before the respective complaints handling offices. Finally, the paper draws conclusions regarding the successes and failures of the Australian framework and its applicability to other jurisdictions. The working paper argues that Australia.s competitive neutrality framework can be viewed as highly successful overall. However, the success can probably only be copied by other countries if these are willing to undertake similarly profound reforms as were engendered as part of the Australian competition reforms in the 1990s with the active participation of the Productivity Commission. The factors behind Australia.s apparent success include: a reform program that applied both to SOEs and to specific industries; the flexibility to apply the framework differently in different geographic contexts; anchoring the commitment to competitive neutrality in strong administrative processes; regular reviews and reporting by individual jurisdictions on the progress of their reforms; clarity in communication to enhance a nationwide understanding of the goals and mechanisms to achieve those goals; transparent public benefit tests to establish the boundaries between commercial and non-commercial public activities; and transparent and politically independent review processes.
Classification-JEL: G30; G34; L4
Keywords: competition policy, competitive advantages, competitive neutrality, corporate governance, sectoral reforms, state-owned enterprises
Creation-Date: 2011-08-01
Number: 4
Handle: RePEc:oec:dafaae:4-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Hans Christiansen
Author-Workplace-Name: OECD
Title: The Size and Composition of the SOE Sector in OECD Countries
Abstract: This working paper summarises the main findings of a data collection exercise documenting the size of the national state-owned enterprise (SOE) sectors in OECD countries (in terms of number, employment and economic value of enterprises), and provides a breakdown by main sectors and types of incorporation. The data is based on questionnaire responses from national governments, covering the years 2008 and 2009. Twenty-seven of the Organisation.s 34 member countries have contributed to date. Employment in SOEs across the OECD area exceeds 6 million people, and that the value of all SOEs combined is close to US$ 2 trillion. In addition to this, the State in many countries holds minority stakes in listed enterprises that are large enough to confer effective control. These enterprises employ a further 3 million people and are valued at close to US$ 1 trillion. Hence, while state ownership of enterprises has declined in recent decades, SOEs and similar entities continue to account for a significant part of the corporate economy in many countries. Following decades of privatisation, the remaining SOEs have a strong sectoral concentration. Around half (in value terms) of all SOEs in OECD countries are located in the network sectors, mostly transportation, power generation and other energy. A further fourth of total valuation is accounted for by financial institutions. In addition, among the partly state-owned listed companies there are many partly privatised telecommunications companies. In other words, not only do state-invested enterprises remain significant, they are also increasingly concentrated in a few ¡°strategic¡± sectors of great importance to the competitiveness of the rest of the business sector.
Classification-JEL: G30; G34
Keywords: corporate governance, privatisation, state-owned enterprises
Creation-Date: 2011-08-01
Number: 5
Handle: RePEc:oec:dafaae:5-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Hans Christiansen
Author-Workplace-Name: OECD
Title: Balancing Commercial and Non-Commercial Priorities of State-Owned Enterprises
Abstract: The overarching question for the government owners of state-owned enterprises (SOEs) is why these companies need to be owned by the state. The OECD Guidelines on Corporate Governance of State-Owned Enterprises provides a “blueprint” for the corporatisation and commercialisation of such enterprises, but it may be assumed that the reason for continued state ownership is that they are expected to act differently from private companies. A relatively clear case occurs when SOEs are established with the purpose of pursuing mostly non-commercial activities. In many cases, their activities might otherwise be carried out by government institutions; the SOE incorporation has been chosen mostly on efficiency grounds.A number of other rationales for public ownership of enterprises have been offered, including: (i) monopolies in sectors where competition and market regulation is not deemed feasible or efficient; (ii) market incumbency, for instance in sectors where competition has been introduced but a state-owned operator remains responsible for public service obligations; (iii) imperfect contracts, where those public service obligations that SOEs are charged with are too complex or malleable to be laid down in service contracts; (iv) industrial policy or development strategies, where SOEs are being used to overcome obstacles to growth or correct market imperfections...
Classification-JEL: G3; G34
Keywords: corporate governance, corporate social responsibility, state-owned enterprises
Creation-Date: 2013-01-18
Number: 6
Handle: RePEc:oec:dafaae:6-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Erik P. M. Vermeulen
Author-Workplace-Name: Tilburg University
Title: Beneficial Ownership and Control: A Comparative Study - Disclosure, Information and Enforcement
Abstract: Investor confidence in financial markets depends in large part on the existence of an accurate disclosure regime that provides transparency in the beneficial ownership and control structures of publicly listed companies. This is particularly true for corporate governance systems that are characterised by concentrated ownership. On the one hand, large investors with significant voting and cash-flow rights may encourage long-term growth and firm performance. On the other hand, however, controlling beneficial owners with large voting blocks may have incentives to divert corporate assets and opportunities for personal gain at the expense of minority investors.The paper focuses particularly on the misuse of corporate vehicles, which arguably poses a major challenge to good corporate governance. Stakeholder rights (e.g. employees and creditors) cannot be properly exercised if ultimate decision- be identified. The accountability of the board may also be seriously endangered if stakeholders and the general public are unaware of decision-making and ultimate control structures. Finally, regulators and supervisory agencies have a strong interest in knowing beneficial owners – in order to determine the origin of investment flows, to prevent money laundering and tax evasion and to settle issues of corporate accountability.
Classification-JEL: G30; G32; K22; K42
Keywords: beneficial ownership, control-enhancing mechanisms, corporate governance, disclosure, inside blockholders, money laundering, outside blockholders, private enforcement, public enforcement, shareholders
Creation-Date: 2013-01-18
Number: 7
Handle: RePEc:oec:dafaae:7-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Mats Isaksson
Author-Workplace-Name: OECD
Author-Name: Serdar Çelik
Author-Workplace-Name: OECD
Title: Who Cares? Corporate Governance in Today's Equity Markets
Abstract: There are two main sources of confusion in the public corporate governance debate. One is the confusion about the role of public policy intervention. The other is a lack of empirical knowledge about the corporate landscape where rules are supposed to be implemented and the functioning of today’s equity markets, where voting rights and cash flow rights are traded. To mitigate some of this confusion, this paper provides both an analytical framework for the role of public policy and a description of the empirical context that influences the conditions for that policy. It underlines the importance of focusing on the overall economic outcome and, in particular, how rules and regulations impact the conditions for companies to grow and create value by accessing public equity markets. In terms of the empirical context, we point to fundamental changes in the functioning of equity markets that may call for a fresh look at the economic effectiveness of corporate governance regulations. Among other things, we document a dramatic shift in listings from developed to emerging markets over the last decade, which means that concentrated ownership at company level has become the dominant form of ownership in listed companies worldwide. We also discuss whether the lack of new listings of smaller companies in developed markets is related to excessive regulatory burdens and unintended consequences of a decade of profound stock market deregulation. The discussion about listings illustrates that corporate governance rules and regulations do not only affect companies that are already listed. From a policy perspective, it is equally important to assess the implications for unlisted companies that may, in the future, require access to public equity markets for growth and job creation. We also document how the lengthened and ever more complex chain of intermediaries between savers and companies may influence the efficiency of capital allocation and the willingness of investors to take an active long-term interest in the companies that they own. It is shown that institutional investors are a highly heterogeneous group and that their willingness and ability to engage in corporate governance primarily depend on the economic incentives that follow from their different business models, investment strategies and trading practices. We provide examples of how regulatory initiatives to increase shareholder engagement may have unintended consequences, and note that the diversity and complexity of the investment chain can render general policies or regulation ineffective.
Classification-JEL: G30; G32; G34; G38
Keywords: capital and ownership structure, corporate governance, initial public offerings, institutional investors, shareholders
Creation-Date: 2013-04-19
Number: 8
Handle: RePEc:oec:dafaae:8-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Fianna Jurdant
Author-Workplace-Name: OECD
Title: Disclosure of Beneficial Ownership and Control in Indonesia: Legislative and Regulatory Policy Options for Sustainable Capital Markets
Abstract: A good corporate governance framework should combine transparency, accountability and integrity and this requires knowledge of beneficial ownership. The protection of minority investors and other stakeholder protection will be challenging without access to reliable information about the ownership, including the identity of the controlling owners, and control structures of listed companies. This report assesses the costs, benefits and practicalities of different approaches, suggesting policy options to better identify ultimate beneficial ownership in Indonesia. This report was requested by the Capital Market and Financial Institution Supervisory Agency in Indonesia, Bapepam-LK, in the context of the OECD-Indonesia corporate governance policy dialogue launched in 2011. The objective is to support policy makers and regulators in their efforts to enhance disclosure and enforcement of beneficial ownership and control as part of overall efforts to improve corporate governance standards and practices in Indonesia.
Classification-JEL: G30; G32; K22; K42
Keywords: beneficial ownership, control-enhancing mechanisms, corporate governance, disclosure, inside blockholders, money laundering, outside blockholders, private enforcement, public enforcement, shareholders
Creation-Date: 2013-07-11
Number: 9
Handle: RePEc:oec:dafaae:9-EN

Template-type: ReDIF-Paper 1.0
Author-Name: David Weild
Author-Name: Edward Kim
Author-Name: Lisa Newport
Title: Making Stock Markets Work to Support Economic Growth: Implications for Governments, Regulators, Stock Exchanges, Corporate Issuers and their Investors
Abstract: This study provides critical observations on the state of key global equity markets as recent developments have put into question their efficiency and effectiveness in facilitating capital formation. It covers the top 26 initial public offering (IPO) producing nations, with a particular focus on stock markets in the United States.
Classification-JEL: G30; G32; G34; G38
Keywords: allocation of capital, corporate governance, equity market structure, initial public offerings, stock exchange, tick size
Creation-Date: 2013-07-11
Number: 10
Handle: RePEc:oec:dafaae:10-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Serdar Çelik
Author-Workplace-Name: OECD
Author-Name: Mats Isaksson
Author-Workplace-Name: OECD
Title: Institutional Investors as Owners: Who Are They and What Do They Do?
Abstract: This paper provides a framework for analysing the character and degree of ownership engagement by institutional investors. It argues that the general term “institutional investor” in itself doesn’t say very much about the quality or degree of ownership engagement. It is therefore an evasive “shorthand” for policy discussions about ownership engagement. The reason is that there are large differences in ownership engagement between different categories of institutional investors. There are also differences in ownership engagement within the same category of institutional investors such as hedge funds, investment funds, etc. These differences arise from the fact that the degree of ownership engagement is determined by a number of different features and choices that together make up the institutional investor’s “business model”. When ownership engagement is not a central part of the business model, public policies and voluntary standards aiming to improve the quality of ownership engagement among institutional investors are likely to have limited effect. Based on an empirical overview of the relative size of different categories of institutional investors, the paper identifies a set of 7 features and 19 choices that in different combinations define the institutional investor’s business model. These features and choices are then used to establish a taxonomy for identifying different degrees of ownership engagement ranging from “no engagement” to “inside engagement”.
Classification-JEL: G30; G32; G34; G38
Keywords: corporate governance, incentives, institutional investors, shareholder activism, shareholder engagement
Creation-Date: 2013-12-03
Number: 11
Handle: RePEc:oec:dafaae:11-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Héctor Lehuedé
Author-Workplace-Name: OECD
Title: Colombian SOEs: A Review Against the OECD Guidelines on Corporate Governance of State-owned Enterprises
Abstract: This report evaluates the corporate governance practices of Colombian SOEs against the OECD Guidelines on Corporate Governance of State-Owned Enterprises (SOEs). The assessment was prepared based on information provided by the Colombian authorities, an analysis of the available literature and interviews with authorities, consultants, academics, and company as well as stakeholder representatives. Following a brief introduction, Part A of the report provides information about the context in which Colombian SOEs operate, including the main aspects of the regulatory framework and its key actors. Part B refers successively to the different chapters of the Guidelines, evaluating Colombian norms and practices in their light. The final section sets out the report’s conclusions and recommendations. Complementary information can be found in the five annexes. The review was prepared at the request of the Colombian authorities and approved by the OECD Working Party on State Ownership and Privatisation Practices.
Classification-JEL: G3; G30; G34; K22; L22
Creation-Date: 2013-12-03
Number: 12
Handle: RePEc:oec:dafaae:12-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Sara Sultan Balbuena
Author-Workplace-Name: OECD
Title: State-owned Enterprises in Southern Africa: A Stocktaking of Reforms and Challenges
Abstract: This report is the first known stocktaking of its kind to provide a regional overview of state-owned enterprise (SOE) governance reforms and challenges across the Southern African Development Community (SADC) region. Part One summarises the challenges and governance practices related to state-ownership across SADC economies; it draws conclusions on how to address common regional priorities. Part Two of the report is organised around country profiles providing a fact-based assessment of SOE reform policies and practices in 14 economies. The report was prepared at the request of the Southern Africa Network on Governance of State-Owned Enterprises – a regional cooperation initiative aimed at improving the corporate governance of SOEs, and mainly covering the member economies of the SADC region. The stocktaking was prepared based on information self-reported by authorities in participating economies and supplemented by desk research.
Classification-JEL: G3; G30; G34; G38; G39
Keywords: corporate governance, financial economics, government policy and regulation, merger and acquisition, restructuring
Creation-Date: 2014-03-10
Number: 13
Handle: RePEc:oec:dafaae:13-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Hans Christiansen
Author-Workplace-Name: OECD
Author-Name: Yunhee Kim
Author-Workplace-Name: OECD
Title: State-Invested Enterprises in the Global Marketplace: Implications for a Level Playing Field
Abstract: State-owned and other state-invested enterprises (SIEs) have become more prominent in the global economy over the last decade. A growing role for state-invested enterprises in the marketplace is not in itself onerous. According to an OECD consensus, as expressed through the Organisation’s legal instruments, SOEs can be operated according to similarly high standards of governance, transparency and efficiency as private companies, in which case the ownership issue is moot. However, only some of the world’s most advanced economies, following decades of reform of their SOE sectors, have approached this point. Moreover, when SOEs operate across borders the challenges may multiply. With this background, this paper compares the difference between SIEs and non- SIEs in five sectors: air transportation, electricity, mining, oil & gas and telecommunication. The empirical analysis indicates that, in addition to any financing advantages, large state-invested enterprises also seem to benefit from an unusually favourable position in their home markets. A comparative analysis further shows that, in the course of the last ten years, SIEs have generally enjoyed higher rates of return than comparable private companies. The paper concludes that the growing role of state-invested enterprises in the international marketplace does not yet present a serious macroeconomic challenge. However, since it is likely to keep growing for some time, challenges need to be addressed relatively soon. This makes for a strong case for enhanced policy coordination and information sharing. If legally binding instruments cannot be developed in the near to medium-term to ensure competitive neutrality, consultation mechanisms could be established through which the main players in international trade and investment can exchange views on matters of common concern related to the state in the marketplace. The ultimate purpose would be ensuring that the international trade and investment environment remains open, non-discriminatory and offering a level playing field.
Classification-JEL: F21; F23; G30; G38; L32; L33
Keywords: competition, competitive neutrality, international investment, multinational firms, state-owned enterprises
Creation-Date: 2014-07-30
Number: 14
Handle: RePEc:oec:dafaae:14-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Alissa Amico
Author-Workplace-Name: OECD
Title: Corporate Governance Enforcement in the Middle East and North Africa: Evidence and Priorities
Abstract: Corporate governance frameworks in the Middle East and North Africa region have undergone a substantial evolution in the past decade. Better enforcement of corporate governance rules and regulations has in the past three years emerged as both a policy challenge and a priority for the region. This emphasis on better enforcement reflects a number of trends including political changes in some countries of the region, the global call for better surveillance of the adoption of governance rules as well as low investor engagement in the region. This paper examines key developments in public and private corporate governance enforcement in the region. It highlights the growing level of public enforcement as expertise within the securities regulators is growing. The paper provides policy recommendations on specific aspects of governance frameworks such as the treatment of related party transactions and board member responsibilities which - if better regulated - could result in more effective governance enforcement in the region.
Classification-JEL: G38; K22; K42
Keywords: board appointment, commercial courts, company law, corporate governance, enforcement, investor engagement, listing requirements, Middle East and North Africa, minority shareholder, redress, securities regulator, shareholder rights, stock exchange
Creation-Date: 2014-09-30
Number: 15
Handle: RePEc:oec:dafaae:15-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Serdar Çelik
Author-Workplace-Name: OECD
Author-Name: Gül Demirtaş
Author-Workplace-Name: Sabanci University
Author-Name: Mats Isaksson
Author-Workplace-Name: OECD
Title: Corporate Bonds, Bondholders and Corporate Governance
Abstract: Worldwide, primary corporate bond markets have become an increasingly important source of financing for non-financial companies. This trend is coupled with a relative decrease in traditional bank lending to non-financial companies and low levels of bond interest rates. Just as shareholders, bondholders can play an important role in corporate governance. They can use both exit and voice. This report provides a comprehensive global overview of all corporate bond issues since 2000 and experiences of governance engagement by bondholders. The report builds on issue level data for more than 100,000 individual bond issues in 108 jurisdictions between 2000 and 2013. Data is provided with respect to the type of issues and numerous bond characteristics, such as country of origin, investment grade, maturity, covenants and conditions for redemption. The report also analyses trends in secondary bond markets, including market liquidity, the role of market makers and the relatively slow introduction of electronic trading systems. In order to analyse trends over time with respect to governance, we provide detailed time series data on the use and relative importance of 15 different categories of covenants. By constructing an overall “covenant protection index” we suggest that bond investors in their search for yield have overall traded governance rights for higher expected returns. This shift also seems to be associated with higher risk-taking. We also conclude that the degree of governance engagement primarily is linked to the business model of the bond investor. We end the report with a discussion about the scope for institutional changes that may build a larger community of truly informed and motivated bond investors.
Classification-JEL: G30; G32; G34; G38
Keywords: bond contracts, bondholders, corporate bonds, corporate governance, covenants, disclosure, enforcement, institutional investors, liquidity, primary markets, secondary markets
Creation-Date: 2015-02-12
Number: 16
Handle: RePEc:oec:dafaae:16-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Ryoko Ueda
Title: How is corporate governance in Japan changing?: Developments in listed companies and roles of institutional investors
Abstract: This research analyses the improvements to corporate governance within Japanese listed companies and the influence of institutional shareholders. Firstly, in order to analyse the external factors that have promoted the recent corporate governance reform, the report starts with an overview of the changes in the Japanese market post 1970s. The main players before the 1990s were the banks, who provided credit to companies as well as being shareholders. Corporate governance in Japan was characterised by the “main bank” system. However, after the “bubble economy” burst in the early 1990s, institutional investors, including domestic pension funds and foreign asset managers, started to have a greater presence. Secondly, the report analyses the recent developments in corporate governance within listed companies. Developments were influenced considerably by institutional shareholders through proxy voting. Further, the report reviews the legislation and relevant rules on corporate governance including the reform of the Companies Act and the Cabinet Office Ordinance on Disclosure of Corporate Information. Thirdly, the report examines the influence of institutional shareholders and their activities towards good corporate governance. In 2009, the “Report by the Financial System Council’s Study Group on the Internationalization of Japanese Financial and Capital Markets” was published and asset managers, such as investment trusts and investment advisory companies, started to disclose policy and results of proxy voting. In February 2014, pursuant to the recommendation of the “Japan Revitalization Strategy 2013”, Japan’s Stewardship Code was published and it is now expected that institutional shareholders play a significant role to engage with investee companies and improve corporate governance within them. The report also analyses the historical changes to practices within shareholder meetings along with examination of the role that institutional shareholders have played in the improvement of corporate governance within Japanese listed companies.
Classification-JEL: G30; G32; G34; G38
Keywords: corporate governance, institutional investors, shareholders
Creation-Date: 2015-08-07
Number: 17
Handle: RePEc:oec:dafaae:17-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Mary Crane-Charef
Author-Workplace-Name: OECD
Title: Stocktaking of Anti-Corruption and Business Integrity Measures for Southern African SOEs
Abstract: This report aims to provide an overview of business integrity and anti-bribery legislation, policies and practices applicable to state-owned enterprises (SOEs) operating across the Southern African Development Community (SADC) region. Part 1 provides a rationale for considering the impact that corruption-prevention and business integrity measures have had in some jurisdictions, based on available academic literature on this subject. Part 2 summarises the framework in seven SADC countries for combating corruption and for encouraging responsible business practices. It also focuses on the application of this framework to SOEs by governments, as well as measures taken by SOEs to limit their exposure to the risks of corruption. The report was undertaken on behalf of the OECD Network on Corporate Governance of State-Owned Enterprises in Southern Africa and is based on voluntary responses to a questionnaire and supplemented with desk research.
Classification-JEL: G3; G30; G38; G39
Keywords: anti-corruption, corporate governance, corruption, government policy and regulation
Creation-Date: 2015-09-01
Number: 18
Handle: RePEc:oec:dafaae:18-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Sara Sultan Balbuena
Author-Workplace-Name: OECD
Title: Concerns Related to the Internationalisation of State-Owned Enterprises: Perspectives from regulators, government owners and the broader business community
Abstract: The rise in state-owned enterprises (SOEs) as growing actors in international trade and investment has received renewed attention in recent years, not least due to controversy that has arisen over SOE foreign investments. This has raised the profile of these issues with policy makers and tilted much of the public debate in one direction. Some concerns revolve around the intentions of these companies, or any potential competitive distortions that could be caused by them which would differentiate them from privately-owned enterprises operating under like circumstances. With a view to keeping the trade and investment environment open, this paper draws attention to particular perceptions of concerns or challenges that arise when SOEs internationalise. Although perceptions are not verifiable facts, they reveal important trends that may inform the debate and shape future government policies towards foreign trade and investment by SOEs. The information in the report is primarily drawn from findings emerging from a three-part perception-based OECD survey addressed to public officials responsible for enterprise ownership, competition enforcement, investment regulation and trade policy in addition to departments of government with broader responsibility for the enterprise and competition landscape, and/or cross-border trade and investment regulation.
Classification-JEL: F21; F23; G3; G30; G38; G39; L32; L33
Keywords: competition, competitive neutrality, corporate governance, international investment, investment policy, state-owned enterprises, trade policy
Creation-Date: 2016-04-06
Number: 19
Handle: RePEc:oec:dafaae:19-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Takahiro Yasui
Author-Workplace-Name: OECD
Title: Corporate Governance of Financial Groups
Abstract: Companies today, in particular banks, insurance companies and other financial institutions, increasingly operate their businesses in a group structure. These financial groups have a growing presence in markets worldwide and the economy as a whole. To do business effectively and efficiently in group structures, corporate groups should be managed in a holistic and integrated manner, in much the same way as an enterprise. Good governance of corporate groups should not therefore be very different from that of a corporation with many departments and branches. Nonetheless, the idiosyncratic risks that group structures bring about may require particular attention be paid to the governance of corporate groups. Such risks include the complexity of group structures and responsibilities among member companies in a multi-layered ownership structure across borders. The legal status of subsidiary companies, which is different from departments or branches of a corporation, should be respected. The governance of corporate groups needs to address inherent issues such as the dilemma of subsidiary boards’ loyalty to the interests of the subsidiary versus the broader interests of the group, and the risks associated with related party transactions. In the case of financial groups, particular consideration should be given to the interests of depositors and insurance policyholders of each financial subsidiary. Financial regulation increasingly establishes requirements for the governance responsibilities of the boards of financial subsidiaries, while emphasising the overall responsibility of the ultimate parents of financial groups.
Classification-JEL: G30; G32; G34; G38
Keywords: corporate governance, corporate groups, financial groups, financial regulation, group structure
Creation-Date: 2016-07-28
Number: 20
Handle: RePEc:oec:dafaae:20-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Vedat Akgiray
Title: The Potential for Blockchain Technology in Corporate Governance
Abstract: Beyond bitcoin, blockchain technology has acquired attention and importance in its own right. Today, it is conceptually accepted that blockchain stands out as a disruptive technology that will change a number of processes in financial services and could in turn impact corporate governance. This paper explores the recent applications of blockchain technology in financial services and outlines regulatory responses, to set the scene for future work in this area on corporate governance. This paper provided background for the Corporate Governance Committee’s roundtable discussion on blockchain technology and the implementation of the G20/OECD Principles of Corporate Governance on 10 April 2018. A subsequent presentation of the paper was given at the OECD Workshop on Digital Financial Assets on the 16 May 2018, and at the OECD-Asian Roundtable on Corporate Governance in Malaysia on 7-8 November 2018. This work also provides a contribution to the work of the OECD Blockchain Policy Centre.
Classification-JEL: G30; G38; O30; O33
Keywords: blockchain, corporate governance, distributed ledger technology, financial market regulation, technological innovation
Creation-Date: 2019-06-25
Number: 21
Handle: RePEc:oec:dafaae:21-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Karsten Sørensen
Title: The governance of company groups
Abstract: The majority of listed companies are part of a group linked through ownership and/or other mechanisms to exercise control. The popularity of group structures is based on a number of economic and legal advantages, including facilitating the supply of goods and services, economies of scale, reaching new markets or new activities, sharing the provisions of internal services such as loans and facilitating mergers and acquisitions. This working paper presents a comparative overview of the regulation of groups in company law. It also discusses how different corporate governance codes make recommendations on issues relevant to the boards in company groups.
Keywords: corporate governance, financial market regulation
Creation-Date: 2021-03-02
Number: 22
Handle: RePEc:oec:dafaae:22-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Caio de Oliveira
Author-Workplace-Name: OECD
Author-Name: Carl Magnus Magnusson
Author-Workplace-Name: OECD
Author-Name: Tugba Mulazimoglu
Author-Workplace-Name: OECD
Title: The role and rights of debtholders in corporate governance
Abstract: This paper provides an overview of developments in non-financial corporate bond markets over the past two decades with respect to their size and credit quality, as well as trends related to insolvency and restructuring. It then explores the role of bondholders in corporate governance, both in normal times and in times of financial distress, and the governance implications of longstanding increases in bond financing by the non-financial sector. In particular, challenges related to bondholder rights, corporate disclosure, the responsibilities of corporate boards, institutional investors and insolvency are discussed.
Creation-Date: 2022-09-15
Number: 23
Handle: RePEc:oec:dafaae:23-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Marie-Estelle Rey
Author-Workplace-Name: OECD
Title: The role of board-level committees in corporate governance
Abstract: This paper presents a review of the different committees set up by the boards of directors of companies to support their functions. It first focuses on the role of and trends in board committees, their contribution to corporate governance and their evolving role in light of the impact of the COVID 19 crisis and emerging issues. It then addresses the functioning, composition and accountability of committees, notably in terms of risk management and sustainability, and their impact on the effectiveness of boards.
Creation-Date: 2022-09-15
Number: 24
Handle: RePEc:oec:dafaae:24-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Kenta Fukami
Author-Workplace-Name: OECD
Author-Name: Daniel Blume
Author-Workplace-Name: OECD
Author-Name: Carl Magnus Magnusson
Author-Workplace-Name: OECD
Title: Institutional investors and stewardship
Abstract: The sustained growth of institutional investors’ assets under management, together with the growing use of passive investment strategies, raises the question of whether existing frameworks adequately address issues related to investor engagement and disclosure. There has been a growth in the regulation of institutional investors and market intermediaries to address conflicts of interest and to enhance their transparency. In parallel, the adoption of stewardship codes and the number of signatories to such codes has been increasing. Their proliferation and to some extent convergence offers insights on recognised good practices. The paper also explores the apparent increase in engagement among institutional investors with respect to environmental, social and governance (ESG) issues, their increasing reliance on ESG ratings and data services, and whether regulatory frameworks or guidance should evolve to take into account these new developments.
Creation-Date: 2022-09-19
Number: 25
Handle: RePEc:oec:dafaae:25-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Carl Magnus Magnusson
Author-Workplace-Name: OECD
Author-Name: Daniel Blume
Author-Workplace-Name: OECD
Title: Digitalisation and corporate governance
Abstract: This paper addresses the implications of digitalisation on corporate governance. It focuses in particular on the potential for digitalisation to improve market supervision and enforcement of corporate governance related requirements and the efficiency of disclosure; its use for remote and hybrid participation in general shareholder meetings; the implications of digital security risks and the role of the board in their management; and how digitalisation can encourage the development of primary public equity markets.
Creation-Date: 2022-09-19
Number: 26
Handle: RePEc:oec:dafaae:26-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Alejandra Medina
Author-Workplace-Name: OECD
Author-Name: Adriana de la Cruz
Author-Workplace-Name: OECD
Author-Name: Yun Tang
Author-Workplace-Name: OECD
Title: Corporate ownership and concentration
Abstract: This working paper documents the trends in the ownership structures of listed companies around the world and the rise in ownership concentration. It identifies three major trends in corporate ownership: the dominance of company group structures, in particular in a number of emerging markets; the growth of state ownership through various state controlled investors; and the re concentration of ownership in the hands of large institutional investors, in particular investors that follow passive index investment strategies. The paper also discusses the implications for corporate governance of corporate ownership by private companies, states and institutional investors in global public equity markets.
Creation-Date: 2022-09-19
Number: 27
Handle: RePEc:oec:dafaae:27-EN

Template-type: ReDIF-Paper 1.0
Author-Name: Emeline Denis
Author-Workplace-Name: OECD
Title: Enhancing gender diversity on boards and in senior management of listed companies
Abstract: As part of a global effort to address existing barriers to gender equality in leadership and employment, countries around the world are taking steps to enhance gender diversity on boards, which can also have positive effects on board dynamics and governance. This paper takes stock of progress and existing policies and practices to enhance gender diversity on boards and in senior management of listed companies. Covering 50 jurisdictions, it focuses on the implications of quotas and targets as the main instruments used to foster gender diversity on boards, and considers the importance of complementary initiatives to strengthen the pipeline for leadership positions.
Creation-Date: 2022-09-20
Number: 28
Handle: RePEc:oec:dafaae:28-EN