OECD PRINCIPLES OF CORPORATE GOVERNANCE

OECD Principles of Corporate Governance



OECD Principles of Corporate Governance

Introduction

The Organisation for Economic Co-operation and Development (OECD) is an international agency consisting of 30 member nations that are dedicated to economic growth and stability, democratic governance, and the economic development of the organization's less economically developed members and nonmember countries. In many ways, the OECD is unique. It provides numerous and varied services to its members including basic in-depth research on global matters, consultations on economic and social issues, and the diplomatic context in which various agreements and conventions have been entered into and observed. Moreover, the work done at the OECD is central and highly significant both in public policy formation in the member states and in terms of corporate governance given the emphasis that the agency has placed on the role that multinationals play in today's world. In short, the OECD can be called a “super organization,” and in addition to having a unique mission and organizational design, the OECD also has a unique history that is a good point of departure in understanding the varied workings and reach of this international super organization.

OECD History

The OECD had its start in the transformation of the Organization for European Economic Co-operation (OEEC). The OEEC, established in 1948 through backing primarily from the United States and Canada, was designed to coordinate the Marshall Plan that had as its objective the reconstruction of Europe after the destructive effects of World War II (Organisation for Economic Co-operation and Development, 2003). The OEEC had as its main mission the promotion of economic cooperation among its 16 member states so that the reconstruction of Europe might take place efficiently. There were several major economic measures that the OEEC introduced to achieve this goal including the development of trade within Europe by reducing obstacles to free trade practices between member states and the establishment of a new customs zone on the Continent. The OEEC also worked on European labor conditions and set up a permanent Committee on Manpower. In short, the OEEC was an economic development agency designed to restore Europe to some of its former stature as the geographic site of several leading economic powers before World War II.

Once the physical restoration of Europe was completed, the OEEC gave birth to the OECD on December 14, 1960. There were 20 original member countries that signed the convention establishing the OECD (Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States). For more than four decades the OECD has been a major player in the economic development of Europe, seeing its role expanded in several directions. It has also been the purveyor of several important international agreements and conventions that have helped shape the world economy. Today, the organization consists of 30 total member countries (added were Japan in 1964, Finland in 1969, Australia in 1971, New Zealand in 1973, Mexico in 1994, the Czech Republic in ...