No cover up

Readers' Views No 235, December 2002
OECD Observer

I enjoyed your sense of irony in using a picture of the UK’s National Economic Development Council on the cover of OECD Observer to illustrate traditional views of corporate governance.

Although it is almost exactly 10 years since the organisation was closed down by the government, it offered a remarkable example of how employers (nearest the camera), trade unions (to the right), government (led by George Brown on the far side) and independents (on the left) could help shape the development of the national economy and industries within it.

Improving corporate governance and particularly the quality of reported information was indeed one of the NEDC’s many achievements. Such organised attempts are currently unfashionable corporatism.

Given the dent that the credibility of published information on firms, discussed in your article, has taken round the world in recent years, perhaps the time has come to recreate some of the corporatist organisations.

Having to satisfy three groups with conflicting objectives is a great help to clarity, objectivity and credibility. One of the difficulties with the corporate governance agenda, as the implementation of the OECD’s own Principles of Corporate Governance shows, is that it appears only some of the interest groups get a say in what is done. This may help explain why the spirit of the Principles is often not applied.

Advisor to the Board, Bank of Finland, Helsinki

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©OECD Observer No 235, December 2002

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