On 28 April 2017, the Financial Stability Board (FSB) published a peer review on corporate governance, which outlines how FSB member-jurisdictions have implemented thus far the G20/Organisation for Economic Co-operation and Development (OECD) Principles of Corporate Governance for publicly listed, regulated financial institutions.

The peer review is significant because it sets out effective practices, areas in which good practices were implemented, and weakness areas where gap analysis should be applied. In the aftermath of the financial crisis of 2008-2009, the lessons learned by financial institutions, regulators and various stakeholders can best be summarised as the necessity to continuously strengthen corporate governance in two critical areas:

  1. Frameworks and rules
  2. Financial institutions’ practices

In summary, the FSB’s peer review findings are:

  1. “…while all FSB member jurisdictions have a comprehensive corporate governance framework, its effectiveness can be impacted if the division of responsibility among financial sector authorities is unclear or if the various requirements overlap, leave unwarranted gaps, or are otherwise not well aligned with each other. The peer review also found that although FSB member jurisdictions’ corporate governance frameworks generally provide some degree of proportionality – typically requiring financial institutions to have risk management systems that are commensurate with their size, complexity and risk profile – other factors such as ownership and control structure, geographical presence and stage of development could also be considered.”
  2. “The peer review offers 12 recommendations to FSB member jurisdictions, standard-setting bodies (i.e. OECD, Basel Committee on Banking Supervision, International Association of Insurance Supervisors and International Organization of Securities Commissions) and financial institutions focusing, among others, on the following areas:
  • Ensuring the basis for an effective corporate governance framework– identify and address gaps or inconsistencies in cases where corporate governance frameworks are found in multiple sources; and augment enforcement powers available to supervisory authorities to address weaknesses in corporate governance regimes or non-compliance with corporate governance
  • Disclosure and transparency– consider improving disclosures related to governance structures, voting arrangements, shareholder agreements and significant cross-shareholdings and cross-guarantees; and identify remuneration information that could be usefully provided to shareholders.
  • The responsibilities of the board – consider adoption, implementation and disclosure of codes of ethics or conduct; and encourage boards to undertake regular assessments of their effectiveness.
  • Rights and equitable treatment of shareholders and key ownership functions– consider requiring that shareholders be given the opportunity to vote on financial institution remuneration policies and the total value of compensation for the board and senior management.
  • The role of stakeholders in corporate governance– consider enhancing the effectiveness of whistle-blower programmes.
  • Other– consider reviewing practices with respect to the effectiveness of rules regarding the duties, responsibilities and composition of boards within group structures; the framework for related party transactions; and the role and responsibilities of independent directors on the board and board committees.”

The FSB’s thematic peer review on corporate governance can be accessed at:


The FSB’s Standards for Sound Financial Systems can be accessed at:


The OECD’s Methodology for Assessing the Implementation of the G20/OECD Principles of Corporate Governance can be accessed at:


Download in PDF: