Effective corporate governance requires regular and

constructive interaction among key stakeholders, the board,

management, internal audit, legal counsel, and external audit

and other advisors.

The board should ensure that key stakeholders are identified

and, where appropriate, stakeholder feedback is regularly

solicited to evaluate whether corporate policies meet key

stakeholders’ needs and expectations.

n Key stakeholders can change over time, and as such,

communities affected by the company’s operations,

creditors, customers, employees, regulators, shareholders,

suppliers, etc.

n When evaluating business success, the company should

also evaluate their social and environmental impact and

determine whether it aligns with corporate objectives and

the interests of key stakeholders.

Board members should act in the best interest of the

company and the shareholders while balancing the interests

of other key external and internal stakeholders.

members constructively.

n Board members should exhibit high integrity and

competence, and provide diverse perspectives in

terms of industry expertise, technical expertise, culture,

and thought.

n Board members should exhibit a commitment of time

and active involvement, including preparation for and

direct participation in appropriate board, committee,

and shareholder meetings. They should be informed

on relevant issues, particularly those involving potential

or existing crises, and be available to consult with

management, as needed.

n Board members should receive ongoing education and

training to perform their responsibilities, including areas of

should include independent directors and those outside

directors who do not qualify as independent, but exclude

members of management.

n The board should undergo regular, robust evaluations

and, as needed, members should be rotated (including

leadership positions within the board) to ensure a balance

of company-specific knowledge and new perspectives.

Effective board evaluations should lead to improved

governance and corporate outcomes.

n Shareholders should have fair opportunities to nominate

The following guiding principles reflect a compendium of viewpoints from the sources cited in the References section. Individual

quotations and citations are not provided since the intention is to create a summarized set of viewpoints from multiple sources.

Prescriptive solutions have not been proposed since corporate governance does not allow for a “one size fits all” approach and

companies will need to find their own best practices based on the company’s age, size, complexity, extent of international operations,

etc. Companies should seek legal advice before implementing specific corporate governance policies and procedures to ensure

compliance with applicable laws and regulations, including securities exchange listing requirements.

DEFINITION Corporate governance is the overarching set of policies, procedures, and relationships that enable an organization to

establish objectives, set ethical boundaries to the acceptable means with which those objectives will be met, monitor the achievement

of objectives, reward successful achievements, and discipline unsuccessful or inappropriate attempts to meet objectives, in order to

keep the organization aligned with the needs and interests of its primary stakeholders.

n Designing management compensation to align with long-term strategic

goals, regularly evaluating performance of the CEO, and overseeing

management succession planning.

n Ensuring that all employees receive adequate training and are compensated

in a way that encourages achievement of corporate objectives.

The board should ensure that the culture of the company is healthy, regularly

monitor and evaluate the company’s core culture and values, assess the

integrity and ethics of senior management, and, as needed, intervene to correct

misaligned corporate objectives and culture.

The board should ensure that structures and practices exist and are well-

The board should ensure that corporate disclosures are consistently

transparent and accurate, and in compliance with legal requirements,

regulatory expectations, and ethical norms.

n The board should ensure that an independent committee (an Audit

Committee or equivalent) with appropriate expertise is responsible for

oversight of both internal and external auditors. Internal audit should have

direct and unfiltered access to this committee; should be adequately

resourced; and its purpose, authority, and responsibility should be formally

defined and consistent with the International Standards for the Professional

Practice of Internal Auditing.

Companies should be purposeful and transparent in choosing and describing

their key policies and procedures related to corporate governance to allow

key stakeholders an opportunity to evaluate whether the chosen policies and

procedures are optimal for the specific company.

n The board should ensure that the company regularly evaluates the full

system of corporate governance to ensure that individual components

are operating as expected, and that all components operate in a cohesive

manner to achieve corporate objectives.

n The board should ensure that corporate governance evaluations

encourage the reporting of potential deficiencies at all levels, including

Corporate Governance Principles for US Listed

Companies (2018), by Investor Stewardship Group.

Enterprise Risk Management—Integrating with

Strategy and Performance (2017), by Committee

of Sponsoring Organizations of the Treadway

Commission (COSO).

G20/OECD Principles of Corporate Governance

(2015), by Organisation for Economic Co-operation

and Development (OECD), which comprises 20

countries/groups, including the U.S.

Key Agreed Principles to Strengthen Corporate

Governance for U.S. Publicly Traded Companies

(2011), by National Association of Corporate

Directors (NACD).

King IV Report on Corporate Governance for South

Africa (2016), by Institute of Directors in Southern

Africa, a non-profit company.

NYSE: Corporate Governance Guide (2014), by New

York Stock Exchange.

Open Letter: Commonsense Principles 2.0 (2018),