Our Corporate Governance Expert Group contributed to our response to the Financial Stability Board's (FSB) Peer Review on Corporate Governance.
We welcomed the FSB's initiative to review how FSB member jurisdictions are applying the G20/OECD Principles of Corporate Governance to publicly listed, regulated financial institutions. We underlined the importance of identifying and sharing effective practices and areas where progress has been made, while noting gaps and areas of weakness.
Regarding the principles, we noted our support for an approach that advocates the development of different codes for companies presenting different characteristics, including those at different stages of development. We supported the flexibility of the OECD Principles, allowing corporate governance to be introduced and developed in a way appropriate to the specificities of each country.
We also supported the "comply or explain" concept included in the OECD Principles, noting that the approach was more effective in influencing the development of a culture of good corporate governance than regulation.
We noted that corporate governance codes should be outcome-oriented and that it is not sufficient for a code to be merely principles-based. We highlighted that the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Size Quoted Companies serves as a practical, outcome-oriented approach to corporate governance for UK quoted companies not obliged to apply the FRC's UK Corporate Governance Code on a mandatory basis.
We emphasised that the principal focus of corporate governance should be creating and preserving value for shareholders and ensuring growth in sustainable long-term shareholder value.