Governance Goes Global
Sargent, Joseph, Global Finance
A half-dozen countries and stock markets over the past year have estab lished or updated best-practice codes concerning corporate governance. At least that many more have guidelines in various stages hovering in the wings.
The most diligent-the United Kingdom, Canada, and South Africahave adopted codes as part of their listing rules and require detailed explanations of how corporate policies measure up to them. The least stringent-including India, the Netherlands, and France -permit companies to treat the guidelines as they see fit. Still others take a middle road, adopting the codes but requiring only that companies state whether or not they comply with them.
The United Kingdom has the most highly developed codes: New guidelines released in September by the Hampel Committee, a group of financial experts, for example, strongly encourages UK companies to pay nonexecutive directors in stock. And Hampel beefs up previous recommendation that audit committees contain a majority of nonexecutive directors by stating that the committee chairman should also be a nonexecutive.
The Australian Stock Exchange may give Britain a run for its money. An updated set of governance guidelines from the Australian Investment Managers Association are outlined in the "Blue Book," released in July. In particular, AIMA recommends more detail on remuneration policies, urging fuller disclosure of option or share schemes. The guidelines also provide a "model form of proxy" that AIMA hopes companies will use.
India reached a milestone with its April Bajaj Report from the Confederation of Indian Industry (CII). …