The International Corporate Governance Network (ICGN) has revised its Principles for the first time since 2005, shifting the focus from structures to behaviour and culture, as well as adding two new Principles, including risk management, as a result of the financial crisis.
According to chair of ICGN, Christianna Wood, the shift in focus from structures to culture and behaviour is new in any governance code but is vital because behaviours are what the structures are aiming to promote.
“The behaviours are what will help boards make better decisions and so create most value,” she said.
This is seen most clearly at the board segment where the Principles highlight the need for appropriate board behaviours, and outline what this means in practice.
The revised Principles also include two new sections as a result from the financial crisis.
One is on risk management and how ICGN members expect companies to address risk and report publicly on it; the other is on corporate culture which for example includes boards to have oversight on pay throughout the organisation.
There is also greater emphasis on the responsibilities of the shareholders.
The aim of the Principles is to assert standards of corporate governance to which ICGN believes all companies should aspire.
The network’s members represent funds under management of more than $9.5 trillion and are locatedÂ in more than 45