28 November 2006

IOSCO consultation report on board independence of listed companies

This Report describes, on a purely factual basis, how each jurisdiction addresses OECD Principle VI.E, with a particular focus upon how the applicable standards are designed to promote and facilitate the board’s exercise of objective, independent judgement.

According to Principle VI.E of the OECD Principles of Corporate Governance boards “should be able to exercise objective independent judgement on corporate affairs”.

To achieve this objective, OECD Principle VI.E. recommends that boards should consider “assigning a sufficient number of nonexecutive board members capable of exercising independent judgement to tasks where there is a potential for conflict of interest”.

The Report is purely meant to gather information and identify dominant trends with respect to corporate governance standards, more particularly with respect to the independence of boards, not to pass judgement on actual corporate governance standards or practices in individual jurisdictions or, even less, to determine “best practice” with respect to standard-setting or company practices.

Deadline for comments is 10 January 2007.

Full report

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