2018 Global Trends in Corporate Governance
Corporate governance is attracting an unprecedented level of attention – from governments, investors, board directors, and even the public. With capital increasingly fungible across borders, investors are more likely to “migrate” as companies struggle to keep up with global governance norms. This positions shareholders as key influencers of governance improvement. Anxious to attract capital, companies are responding by working proactively to improve governance , even in countries where regulatory standards have weakened. Governments, meanwhile, are concerned to strike the right regulatory balance, avoiding laws, rules, and norms of behavior that are too strict and that would encourage companies to domicile or list elsewhere.
In this environment, every aspect of governance matters – from the quality of management and the independence of the board to shareholder confidence.
These are the vital trends and developments covered in the third annual Global Trends in Corporate Governance (GTCG) report from Farient Advisors and the Global Governance and Executive Compensation Group (GECN). This research initiative serves as a resource for corporate boards and management, helping them understand the implications of best practices and regulation as they develop, locally and around the world.
The 2018 GTCG report encompasses 20 countries, with France, Japan, and Saudi Arabia added to the GTCG universe for the first time this year. It highlights three critical areas of concern for global stakeholders – Executive Compensation, Board Structure & Composition, and Shareholder Rights – and identifies key action steps that company boards should take to position themselves in a rapidly changing governance landscape.
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