Early check-up for business ethics

Business ethics are in the spotlight everywhere and OECD countries have agreed to bring forward a planned assessment of the OECD Principles of Corporate Governance to 2004 from 2005. Meanwhile, the OECD plans to examine governance developments in corporate and financial spheres in a bid to identify lessons that can help the assessment. The decision to bring the assessment forward was made at the OECD annual ministerial council in Paris in May (see OECD.org, page 54) and follows several headline stories where business behaviour was called into question, from failure to transmit information to shareholders to alleged false accounting.

Ministers agreed at the May meeting that effective enforcement of corporate governance rules is essential and they determined to improve the rules to enhance transparency and accountability and so strengthen investor confidence and market stability. They also stressed that governments and supervisory bodies need to be vigilant to ensure that financial standards, regulations and market surveillance protect the interests of stakeholders.

OECD ministers adopted the non-binding Principles of Corporate Governance in 1999. The principles are intended to serve as a reference point for countries’ efforts to evaluate and improve their own legal, institutional and regulatory framework for corporate governance. The OECD is co-operating with the World Bank to promote corporate governance reform efforts worldwide, using the Principles of Corporate Governance as a benchmark.

© OECD Observer No 233, August 2002

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