TUAC Submission on the Review of the Principles of Corporate Governance
TUAC comments submitted on the occasion of a consultation with the OECD Corporate Governance Committee



Meeting on 13-14 October 2014, the OECD Committee on Corporate Governance is to consider a second proposal of revision of the Principles of Corporate Governance. Ahead of a consultation with the Committee 13 October morning, the TUAC submits the following comments and proposals of amendments on the OECD draft.



The proposed marked-up (document DAF/CA/CG(2014)3/REV1) offers a number of improvements to the text. For example, Chapter I (Supervision & enforcement) includes two new Principles respectively on the regulation of private exchanges (I.D) and on fair pricing in trade venues (I.G) which, as we understand it, aim at addressing the concerns around un-regulated “dark pools” markets and speculative high frequency trading.

In light of our initial statement on the review process in March  and our marked-up proposal that followed in April , we believe however that more could be done to raise the ambition of the review process as a whole. In previous submissions, the TUAC outlined five priorities for the review process: (i) Raising the voice of workers in the firm, (ii) Accountability along the investment chain, (iii) Responsible use of shareholder rights, (iv) Reinforcing board accountability, and (v) Reining in executive pay.

In what follows, we share our comments and suggested amendments to the text chapter-by-chapter, based on the above priorities. Among others, our marked-up proposals aim at:

  • Encouraging a responsible use of shareholder rights and disclosure of shareholders’ responsible investment practices (Ch. II & III);
  • Accountability of asset managers and other financial intermediaries (Ch. III);
  • Recognising that stakeholders (other than shareholders) have rights and setting as a principle the right of workers of the company to be informed and consulted (Ch. IV);
  • Ensuring robust company reporting on non-financial risks, including human rights, social, environmental and tax risk (Ch. V); and
  • Highlighting board oversight of executive remuneration, of risk management and of compliance with international agreements, the need for separation of CEO and chair position in one-tier board structure and the equal treatment of board-level employee representatives (Ch. VI).

Regarding process and policy coherence within the OECD:

  • We urge the Committee to raise the public visibility of the process and to give instructions to the OECD Secretariat for stakeholder groups – including responsible investment forums and relevant NGOs – to make their voice heard; and
  • We hope that relevant OECD bodies – including those covering responsible business conduct, institutional investor long term investment practices, corporate taxation, and green growth – are also engaged appropriately in the process.

(full text in the attached pdf file)