Uses and Limits of Conventional Corporate Governance Instruments : Analysis and Guidance for Reform - Part Two
This private sector opinion is organized in two parts. Part one, published in June 2009, examined the uses and limits of five conventional corporate governance instruments: transparency, independent monitoring, economic alignment, shareholder right...
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| Format: | Brief |
| Language: | English |
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Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2009/06/11504352/uses-limits-conventional-corporate-governance-instruments-analysis-guidance-reform-part-two http://hdl.handle.net/10986/11118 |
| Summary: | This private sector opinion is organized
in two parts. Part one, published in June 2009, examined the
uses and limits of five conventional corporate governance
instruments: transparency, independent monitoring, economic
alignment, shareholder rights, and financial liability and
suggested ways to improve their application. Part two, the
essay that follows, recommends how policymakers should
approach corporate governance reform generally, with a view
toward strengthening the effectiveness of conventional
corporate governance instruments. Drawing upon the lessons
learned from analyzing the application of conventional
corporate governance tools to different situations and
contexts, policymakers can take a number of steps to improve
corporate governance reform efforts, including: 1) calibrate
reforms to fit the surrounding context; 2) assess how an
instrument will influence the behavior and focus of the
affected parties; 3) be prepared to take difficult decisions
to resolve challenging corporate governance issues; 4)
ensure coherence of tools employed with the legal,
regulatory, and tax regimes; 5) employ 'carrots'
as well as 'sticks' to improve corporate
governance standards; and 6) focus on social incentives and
values to complement existing governance instruments. |
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