1. MOEX Conference on Corporate Governance in Russia,
The OECD Reviews on Flexibility and Proportionality in Corporate Governance
MOEX Conference on Corporate Governance in Russia,
4 December 2018, Moscow.
Hans Christiansen
Senior Economist
Corporate Governance and Corporate Finance Division
OECD

2. Flexibility and proportionality in corporate governance
Flexibility and proportionality is an inherent part of the legal framework of most jurisdictions.
The rationale is to accommodate differences in company practices, while achieving desired regulatory outcomes.
And it is by no means a way to weaken the effectiveness of the corporate governance framework.
But it can increase efficiency and avoid overregulation.

3. Adapting to a changing financial and corporate landscape
The development of the G20/OECD Principles of Corporate Governance was informed by a number of special studies about key developments in both the financial and corporate sectors.
The decrease in smaller growth company listings
Changes in corporate characteristics and business models
Increase in institutional ownership
Changes in business models of stock exchanges

4. The G20/OECD Principles on Flexibility and Proportionality
Rules should be developed with a view to their impact on overall economic performance and market integrity.
They should be flexible enough to meet the needs of corporations operating in widely different circumstances.
They should allow for flexibility and proportionality. For example with respect to:
size
ownership and control structure
geographical presence
sectors of activity
the company's stage of development

5. 7 policy areas, 39 countries:
The OECD Reviews on Flexibility and Proportionality in Corporate Governance
7 policy areas, 39 countries:
Board composition, board committees and board member qualifications  
Say on pay and the detail of disclosure on remuneration 
Related party transactions
Disclosure of periodic financial information and ad-hoc information 
Major shareholding disclosure
Takeovers
Pre-emptive rights

6. Criteria that may motivate and allow for flexibility and proportionality
The review surveys the following criteria that may motivate and allow for flexibility and proportionality with respect to the implementation of corporate governance rules.
Size (of equity, sales, revenues etc.)
Ownership and control structure
Listing status (venue, cross-listing etc.)
Maturity of the firm
Accounting standards
Legal form

7. Survey results - 1
Number of jurisdictions that reported that they had at least one criterion that allowed for flexibility and proportionality
Source: OECD (2018), Flexibility and Proportionality in Corporate Governance
A vast majority of countries have criteria that allow for flexibility and proportionality at company level in all of the seven areas of regulation.

8. Survey results - 2
Number of jurisdictions that reported the use of flexibility mechanism and their application across the seven areas regulation
Source: OECD (2018), Flexibility and Proportionality in Corporate Governance
Company size and the listing status are the most common reasons to apply flexibility and proportionality.

9. Thank you for your attention!
More information about the OECD’s work on corporate governance is available at:
The OECD Secretariat welcomes any questions and comments. Please address them to:
Mr. Mats Isaksson
Head of Division
Corporate Governance and Corporate Finance Division Directorate for Financial and Enterprise Affairs, OECD
[Tel: |