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This report presents the results of a set of thematic peer reviews based on the G20/OECD Principles of Corporate Governance. The theme of the reviews is the availability of flexibility and proportionality measures that can be used when implementing key areas of corporate governance regulation such as company law and securities regulation. The regulatory areas that are covered by the report are board composition, board committees and board member qualifications; say on pay and the detail of disclosure on remuneration; related party transactions; disclosure of periodic financial information and ad-hoc information; disclosure of major shareholdings; takeovers, and pre-emptive rights. The report covers 39 jurisdictions and in-depth case studies of Italy, Japan, Portugal, Sweden, the United Kingdom and the United States.
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The quality of corporate governance regulation affects the supply of capital to the real economy. It also influences how well this capital is used in the hands of individual companies. As a consequence, the design of corporate governance regulation has a critical impact on key policy objectives, such as the level of investment, productivity growth, business sector dynamics and financial stability.
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This report finds that a vast majority of countries have criteria that allow for flexibility and proportionality at company level in all of the seven areas of regulation that are being reviewed. Figure 1. below shows that when it comes to rules about board composition, board committees and board qualifications, all of the 39 jurisdictions included in the survey reported that they had criteria that allowed for flexibility and proportionality. In the other six areas of regulation that were reviewed, between 75 and 85% of the jurisdictions reported that there was scope for flexibility or proportionality in their implementation at company level.
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This section offers an introduction to the topic of the thematic review, describing the background against which the work was conducted. It covers the concepts of flexibility and proportionality; their use in the G20/OECD Principles of Corporate Governance; and describes the rationale for a flexible and proportional approach to corporate governance by offering historical and contemporary examples. It also highlights its applicability to some of the opportunities and challenges that come with current capital market developments.
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This section presents the methodology and the process for conducting the thematic reviews, including an online questionnaire to take stock of the use of flexibility and proportionality in corporate governance frameworks across jurisdictions. It also addresses some issues with respect to the interpretation and use of the data.
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This chapter presents the results of the review in the area of board composition, board committees and board member qualifications. It takes stock of the criteria and mechanisms that may motivate and allow flexibility and proportionality in the implementation of rules and regulations relating to the area across the 39 jurisdictions that responded the survey used for the reviews. It also includes a case study of the British corporate governance framework in the area submitted by Widad Chhibi and Ilaria Miller from the UK Department for Business, Energy and Industrial Strategy (BEIS).
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This chapter presents the results of the review in the area of say on pay and the detail of disclosure of remuneration. It takes stock of the criteria and mechanisms that may motivate and allow flexibility and proportionality in the implementation of rules and regulations relating to the area across the 39 jurisdictions that responded to the survey used for the review. It also includes a case study of the Swedish corporate governance framework in the area submitted by Rolf Skog and Erik Lidman.
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This section presents the results of the review in the area of related party transactions. It takes stock of the criteria and mechanisms that may motivate and allow flexibility and proportionality in the implementation of rules and regulations relating to the area across the 39 jurisdictions that responded the survey used for the review. It also includes a case study of the Italian corporate governance framework in the area submitted by Marcello Bianchi (Assonime).
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This chapter presents the results of the review in the area of disclosure of periodic financial information and ad-hoc information. It takes stock of the criteria and mechanisms that may motivate and allow flexibility and proportionality in the implementation of rules and regulations relating to the area across the 39 jurisdictions that responded the survey used for the review. It also includes a case study of the U.S. corporate governance framework in the area submitted by the staff of the U.S. Securities and Exchange Commission.
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This chapter presents the results of the review in the area of disclosure of major shareholdings. It takes stock of the criteria and mechanisms that may motivate and allow flexibility and proportionality in the implementation of rules and regulations relating to the area across the 39 jurisdictions that responded the survey used for the review. It also includes a case study of the Japanese corporate governance framework in the area submitted by Akito Konagaya.
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This section presents the results of the review in the area of takeovers. It takes stock of the criteria and mechanisms that may motivate and allow flexibility and proportionality in the implementation of rules and regulations relating across the 39 jurisdictions that responded the survey used for the review. It also includes a case study of the Portuguese corporate governance framework in the area submitted by Juliano Ferreira from CMVM.
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The OECD Corporate Governance Committee has decided to conduct a thematic peer review1 on the use of flexibility and proportionality in corporate governance frameworks. This questionnaire seeks to take stock of criteria and mechanisms that may motivate and allow flexibility and proportionality in the application of rules and regulations relating to selected areas of regulation within corporate governance frameworks.