Thursday, September 30, 2010

NYSE Euronext Outlines 10 Core Principles of Corporate Governance

On September 23, 2010, NYSE Euronext's Commission on Corporate Governance released a report identifying 10 fundamental governance principles for investors, issuers, broker-dealers, and other market participants.

The NYSE-sponsored Commission's 10 core principles of strong corporate governance are the following: 
  1. The Board must focus on creating long-term sustainable growth instead of encouraging excessive risk-taking;
  2. Corporate management has a critical role in corporate governance; 
  3. Although NYSE does not limit a board to just one non-independent director, it encourages boards to establish an appropriate representation of independent directors;
  4. Market-based and collaborative governance solutions are preferable to over-reliance on legislation and agency rule-making;
  5. Good corporate governance should be integrated with the company's business strategy and not viewed as simply a compliance obligation;
  6. Shareholders have a responsibility and long-term economic interest to vote their shares in a reasoned and responsible manner, and should engage in a thoughtful dialogue with companies;
  7. Transparency is critical to good governance--while companies should have appropriate disclosure policies and practices, investors should disclose ownership of derivatives or other securities on a timely basis;
  8. Proxy advisory firms serve an important role in the markets, and thus should be held to appropriate standards of transparency and accountability;
  9. The SEC should work with exchanges to ease the burden of proxy voting while encouraging greater participation by individual investors in the proxy voting process; and
  10. The SEC should not only periodically assess the impact of major governance reforms, but should also expand the use of "pilot" programs to help identify any implementation problems before a program is fully rolled out.
NYSE Commission on Corporate Governance's News Report can be found here; its video news release, here; and its full report here.

To view the members of the Commission, click here.

Posted by David Schatz