The G20/OECD Principles of Corporate Governance are the leading international standard for corporate governance. They aim to help policy makers and regulators evaluate and improve legal, regulatory and institutional frameworks for corporate governance, with a view to supporting market confidence and integrity, economic efficiency, and financial stability.
The Principles underwent a comprehensive review in 2021-2023 to update them in light of recent evolutions in corporate governance and capital markets. The revised Principles were adopted by the OECD Council at Ministerial Level in June 2023 (the Principles are embodied in the OECD Recommendation on Principles of Corporate Governance [OECD/LEGAL/0413]) and endorsed by G20 Leaders in September 2023. The Principles are also one of the Financial Stability Board’s Key Standards for Sound Financial Systems, and form the basis for the World Bank Reports on the Observance of Standards and Codes (ROSC) in the area of corporate governance.
The review had two major objectives: to support national efforts to improve the conditions for companies’ access to finance from capital markets, and to promote corporate governance policies that support the sustainability and resilience of corporations which, in turn, may contribute to the sustainability and resilience of the broader economy.
Accordingly, a major evolution in the Principles is the new Chapter on “Sustainability and resilience” which reflects the growing challenges corporations face in managing climate-related and other sustainability risks and opportunities. This new Chapter also incorporates Chapter IV on “The Role of Stakeholders in Corporate Governance” of the previous version of the Principles. A substantial number of new recommendations have also been developed and integrated within the existing chapters of the Principles, whose structure remains otherwise unchanged.
The review of the Principles was undertaken by the OECD Corporate Governance Committee, chaired by Mr Masato Kanda. OECD, G20 and FSB members participate in the Committee and contributed to the review on an equal footing. Important contributions were also received from the OECD’s regional corporate governance roundtables in Asia and Latin America, and from Business at OECD (BIAC) and the Trade Union Advisory Committee (TUAC). An online public consultation and in-person stakeholder consultation were also held, and experts from relevant international organisations, notably the Financial Stability Board, the International Monetary Fund, and the World Bank Group, participated in the review.
In order to ensure the continued accuracy and relevance of the Principles, the review was supported and informed by extensive empirical and analytical work examining recent changes in both capital markets and corporate governance policies and practices. The reports developed informed both the Committee’s choice of priority areas for consideration during the review as well as the revisions themselves.
The OECD, G20 and relevant stakeholders will now endeavour to promote and monitor the effective implementation of the revised Principles globally. This will include a review of the Methodology for Assessing the Implementation of the Principles of Corporate Governance and the regular publication of the OECD Corporate Governance Factbook which assesses implementation of the Principles in a large number of countries.