31 October 2018

Business leaders back updated corporate governance principles

Pledge for 'commonsense principles' finds more backers in renewed pledge as US leaders seek to promote multi-stakeholder dialogue.

The chief executives of major public companies and institutional investment firms have signed up to a revised set of principles designed to provide ‘a basic framework for sound, long-term-oriented governance.’

Renewed pledge

The business leaders have pledged in an open letter to apply the principles in their own business and called on other ceos to join them. The pledge is based on a 12-page document termed the Commonsense Corporate Governance Principles 2.0. This updates an initial set of principles released in 2016, signed by CEOs of 13 organizations, including Berkshire Hathaway, BlackRock, General Electric, General Motors, JPMorgan Chase, State Street Global Advisors and Vanguard.  The new pledge include the ceos of another nine organizations, including DowDuPont, Johnson & Johnson, Procter & Gamble and the Washington State Investment Board. The pledge covers: board of directors’ duties, shareholder rights, Public reporting, board leadership, management succession planning, and, investors’ role in corporate governance.

Commonsense principles

The authors of the principles stay they intend to ‘promote a constructive dialogue on good corporate governance to benefit the millions of Americans who work for and invest in America’s public companies, create economic growth and sustain the health of America’s corporations and markets.’ Warren Buffett, chairman and ceo of Berkshire Hathaway, says in a statement ‘good corporate governance is critical to the success of American companies and to the American economy overall. This document takes it to another level of sound, commonsense principles that have been endorsed by multiple prominent business leaders and investors. It is a living document to help spur a larger conversation among boards, investors and companies for the benefit of all Americans.’