Now that corporate governance is firmly established as a measure of how well companies are being run, governance assessments that measure the effectiveness of boards and management have become a critical part of the investment-evaluation process for shareholders around the globe.

However, since governance practices, standards and enforcement vary widely from country to country, numerous oversight challenges persist for directors. In light of this, many progressive boards and managements are not just tracking trends in their proverbial back yards but are required to do so globally, asking, “What lies ahead?  How might we prepare for future challenges?”

To answer these critical questions, Farient Advisors, in conjunction with its partners in the Global Governance and Executive Compensation Network (GECN), a select team of premier independent advisory firms specializing in compensation and governance challenges, undertook an unprecedented study covering 17 countries spanning six continents to gather insights into global corporate governance practices in three broad categories:

  1. Executive Compensation
  2. Board Structure & Composition
  3. Shareholder Rights

The key findings are remarkable:

  • There is an unmistakable and growing trend toward commonality in governance practices around the world. This convergence of governance norms is likely to persist.
  • Shareholders are becoming more adept and proactive in influencing governance change.
  • Companies want to be seen as an attractive place in which to invest capital. As a result, boards themselves are volunteering for stronger, more shareholder-friendly governance.

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