Towards global convergence in corporate governance: An assessment of the current situation
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Volume 1 Number 4
Towards global convergence in corporate governance: An assessment of the current situation Georges Ugeux Received (in revised form): 17th March, 2004 Galileo Global Advisors LLC, One Rockefeller Plaza, Suite 1722, New York, NY 10020, USA; Tel: +1 212 332 6044; Fax: +1 212 332 6033; E-mail: [email protected]
Georges Ugeux, a 59-year-old Belgian national, began his career in 1970 in Socie´te´ Ge´ne´rale de Banque (now Fortis Bank). In 1985, he became Managing Director of Morgan Stanley’s Mergers and Acquisitions department. In 1988, he was appointed Group Finance Director at Socie´te´ Ge´ne´rale de Belgique, and in 1992, he became President of Kidder, Peabody Europe. From 1995 until joining the NYSE in September 1996 as Group Executive Vice President, International & Research, Georges Ugeux served as President of the European Investment Fund. In October 2003, he founded Galileo Global Advisors LLC to offer independent advice on international business development, restructuring, compliance and capital market issues. Georges Ugeux holds a Doctorate in Law and a Licentiate in Economics from the Catholic University of Louvain. He has lectured at that University as well as at the College of Europe in Bruges. He has also served as a special advisor to the Program on International Financial Systems at Harvard Law School.
ABSTRACT KEYWORDS: regulatory convergence, corporate governance, Sarbanes–Oxley, Higgs report, Bouton report, Cromme report This paper highlights the remarkable convergence that has happened throughout the world in the field of corporate governance since the Cadbury report in the UK and the Vienot report in France, which makes the application of the Sarbanes–Oxley Act of 2002 to non-
US companies particularly strange. But the difference is not and never has been so much at the level of principles, and it is in the implementation of regulatory principles that the major divergence of approaches between countries lies. No country has the monopoly on the best rules, but most now recognise that the role of the Board of Directors requires a mix of independence, relevant experience and expertise that together form the indispensable key to the efficient functioning of capital markets: investor confidence. The main issue will be a convergence in implementation through a reinforcement of regional and international cooperation, particularly through the enhancement of the International Organization of Securities Commissions.
INTRODUCTION The last decade saw a number of initiatives in the field of corporate governance. Most of these initiatives are national, since there is no global regulatory framework. The Lyons G7 meetings spent a considerable amount of time looking at the possible ways to achieve some form of regulatory framework for global financial institutions and capital markets. The only global associations in this field, the World Federation of Exchanges (WFE) and the International Organization of Securities Commissions (IOSCO), have never been set up to exercise that function that is
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