1 Corporate Governance in Asia From principles to practice: Regional approach Melbourne, Australia 23 October 2009 Kenji Hoki Outreach Advisor Corporate Affairs Division, DAF The views expressed in this presentation are those of the author and do not necessarily represent the opinions of the OECD or its Member countries

2 OECD Strategic Response to Crisis & Corporate Governance Strengthening Corporate Governance is one of key actions against the Financial Crisis (OECD Strategic Response) Remuneration system, Risk management practice, Performance of Boards and Exercise of shareholders rights are key areas to encourage good practice Peer review mechanism along with FSB’s initiatives will be established

3 Update of OECD – IOSCO Cooperation on Corporate Governance The Financial Fraud Report (February 2005) recommended that the Technical Committee work jointly with the OECD to undertake further analysis of independent directors and additional required protection. Report “Board Independence of Listed Companies” (March 2007) Report “Protection of Minority Shareholders in Listed Issuers” (June 2009)

4 Corporate Governance in Asia From Principles to Practice OECD Principles of Corporate Governance: one of the FSB’s 12 key standards for sound financial systems Asian Roundtable on Corporate Governance: regional hub for exchanging experiences and advancing the reform agenda on corporate governance in Asia Asian White Paper: developed on consensus to identify key areas and six priorities OECD Principles of Corporate Governance* Asian Roundtable on Corporate Governance White Paper on Corporate Governance in Asia In-Depth Work based on the White Paper * The full text of the OECD Principles can be obtained from our website:

5 OECD Asian Roundtable on Corporate Governance Provide a committed platform in Asia for senior decision-makers involved in corporate governance to:  Provide a reference & raise awareness supporting corporate governance reform  Share experiences & new insights among the region  Identify the challenges facing Asia & discuss solutions  Build consensus & facilitate implementation

6 White Paper on Corporate Governance in Asia* 1.Awareness Raising 2.Implementation and Enforcement of Laws and Regulations 3.Convergence with International Standards for Accounting, Audit and Non-Financial Disclosure 4.Function of Boards of Directors 5.Protection of Non-Controlling Shareholders 6.Corporate Governance of Banks Issued in 2003, identify key areas for improvement and guidance on how to improve corporate governance practices in Asia using the OECD Principles, with 6 priorities & 36 recommendations. * The full text of the White Paper can be obtained from our website:

7 Following up the White Paper 1. Awareness Raising 2. Implementation and Enforcement of Laws and Regulations 3. Convergence with International Standards for Accounting, Audit and Non-Financial Disclosure 4. Function of Boards of Directors 5. Protection of Non-Controlling Shareholders 6. Corporate Governance of Banks 7. Appendix: Table on CG Frameworks in Asia 2006 Policy Brief on CG of Banks 2007 Enforcement of CG in Asia 2009 Guide on Fighting Abusive Related Party Transactions 2007 Asia: Overview of CG Frameworks 2006 Implementing the White Paper

8 Outline of 2009 Asian Roundtable Meeting* Held in Manila, Philippines on 9-10 September  Launch “Guide on Fighting Abusive RPTs”  CG & the Financial Crisis with inputs from China (CSRC), India (SEBI) and Indonesia  Setting the direction on CG in Asia for next decade  The Role of Stock Exchange in Promoting CG * The full text of the Agenda can be obtained from our website:

9 Guide on Fighting Abusive RPTs* Related Party Transactions are inevitable in Asia with a controlling ownership structure (family or state). Abusive RPTs are one of the biggest corporate governance challenges in Asia. The Guide provides concrete options for monitoring and curbing abusive RPTs, focusing on disclosure and the board/shareholders approval system. It also loosk into the role of auditors and independent directors. * The full text of the Guide can be obtained from our website:

10 Planed Milestones for New Roadmap 1. Develop Scoping Paper based on papers, opinions and suggestions in 2009 Asian Roundtable 2. In-Depth Discussion based on the Paper in 2010 Asian Roundtable 3. Possible Task Force on Updated White Paper 4. Drafting session or Launch for the White Paper in 2011 Asian Roundtable

11 Regional Approach to Advancing Corporate Governance Reform The Roundtable plays a significant role in Asia, reaching beyond its regional coherent network Support from Asian Development Bank to the last Asian Roundtable with financial assistance Cooperation with Corporate Governance Task Force of Asian and Oceanian Stock Exchange Federation’s for “Study Report of Asia-Oceania Stock Exchange”

12 Conclusion Asian Roundtable on Corporate Governance provides an opportunity for APRC to strengthen good corporate governance practices in your jurisdictions. We are happy to share experiences on how to improve implementation and enforcement of the OECD Principles with IOSCO. Asian Roundtable is looking forward to closer relationship with APRC.

13 Other OECD Activities in relation to Asian Capital Market OECD – ADBI Round Table on Capital Market Reform in Asia –Established in 1999 as served regional forum for policy dialogue on capital market. –10 th Roundtable was held in Tokyo March 2009 and 11 th Roundtable will be held around February or March –Next meeting will discuss about overall financial market issues after the Global Financial Crisis like exit-strategy.

14 THANK YOU! Please feel free to consult our website or contact Kenji Hoki at