The OECD Corporate Governance Committee is reviewing the G20/OECD Principles of Corporate Governance. The review was launched in November 2021 and will be completed in 2023. OECD, G20 and FSB members participate in the review, as well as other countries through the Committee’s regional Roundtables (Asia, Latin America and the Middle East and North Africa). The Terms of Reference and Roadmap agreed by the Corporate Governance Committee sets out the main priorities and timeline for the review. The review’s overall goal is to strengthen the Principles, in particular by adapting relevant elements to the post COVID-19 environment, taking into account any structural effects of the crisis on capital markets and corporate governance practices. The revised Principles will aim to strengthen corporate sector resilience through better risk management and to improve companies’ access to finance from capital markets. In October 2021, OECD Ministers and G20 Leaders supported the Committee’s decision to review the Principles. Ministers and Leaders “recognised the importance of good corporate governance frameworks and well-functioning capital markets to support the recovery, and looked forward to the review of the G20/OECD Principles of Corporate Governance”. A public consultation on proposed revisions to the Principles will be held in fall 2022.

1. The Review of the
G20/OECD Principles of Corporate Governance
March 2022

2. The G20/OECD Principles of Corporate Governance
 Main international standard for corporate governance. First
issued as an OECD instrument in 1999 and endorsed by G20
Leaders in 2015.
 53 adherents: including all OECD, G20 and FSB members.
 Endorsed by the Financial Stability Board as one of the Key
Standards for Sound Financial Systems and used by the
World Bank as the benchmark for Corporate Governance
Country Assessments.

3. The G20/OECD Principles of Corporate Governance
 Role: help policy makers evaluate and improve the legal, regulatory and institutional
framework for corporate governance.
 Six pillars:
o the basis for an effective corporate governance framework
o the rights and equitable treatment of shareholders and key ownership functions
o institutional investors, stock markets and other intermediaries
o the role of stakeholders in corporate governance
o disclosure and transparency
o the responsibilities of the board
 By promoting good corporate governance, the Principles fulfill three major functions:
o promote access to finance, innovation and entrepreneurship
o provide a framework to protect savers
o support corporate sector sustainability and resilience

4. Promote access to finance, innovation and entrepreneurship
Top 10 markets by number of non-financial
company IPOs over the last 10 years
Capital raised by non-financial companies in
public equity markets
 Record equity issuance during the COVID-19 crisis: USD 2 trillion in 2020-2021.
 Decline in the number of listed companies in most advanced markets except in Asia
which today hosts half of all listed companies in the world.
 Sound corporate governance frameworks gives investors, executives, corporate
directors and stakeholders the tools and incentives needed to ensure companies can
access the capital they need.
Source: OECD Capital Market Series dataset
0 1 000 2 000 3 000
Canada
Sweden
United Kingdom
Hong Kong (China)
Korea
Australia
India
Japan
United States
China
0
200
400
600
800
'00 '03 '06 '09 '12 '15 '18 '21
SPOs IPOs
2021 USD, billions

5. Provide a framework to protect savers
Investors’ holdings in public equity markets Domestic and foreign institutional investors holdings
 More than 40 000 listed companies in the world with a combined market value of
USD 105 trillion.
 Equity is the largest asset class available to households.
 Institutional investors are the largest owners in stock markets and they invest a large
share of their portfolios in foreign markets. Corporate governance policies are
essential to protect savers across borders.
Source: OECD Capital Market Series dataset
Corporations
11%
Public
sector
10%
Strategic
individuals
9%
Institutional
investors
43%
Other free-float
27%
0
15
30
45
60
75%
Others China Asia
(excl.
CN&JP)
Japan Other
advanced
Europe United
States
US-domiciled investors
Foreign investors (excl. US-domiciled)
Domestic investors

6. Support corporate sector sustainability and resilience
 Climate change is a financially material risk for companies representing two-thirds of
global market capitalisation.
 Leverage in the corporate sector has increased significantly: the aggregate leverage
ratio has doubled since 2005.
 Good corporate governance better access to capital markets = stronger balance
sheets + new and innovative businesses that support the green and digital transitions
essential for long-term resilience.
Leverage in non-financial corporations
Share of market capitalisation
exposed to financially material climate risks (2020)
Source: OECD Capital Market Series dataset, FactSet, Thomson Reuters Eikon, Bloomberg, SASB mapping
58%
59%
59%
66%
64%
30% 40% 50% 60% 70%
Europe
Japan
China
United
States
Global
0
1
2
3
4
5
20
25
30
35
40 %
'05 '10 '15 '20
Debt-to-assets
Debt-to-EBITDA (RHS)

7. The review of the G20/OECD Principles of Corporate Governance
Rationale
 Objective: strengthen the Principles, in particular by adapting
relevant elements to the post-COVID-19 environment.
 Overseen by the OECD Corporate Committee, in which OECD, G20
and FSB members participate.
 Covid-19 crisis has revealed or exacerbated weaknesses in
corporate governance and major shifts in capital markets, in
particular:
o the management of climate change and other ESG risks
o the decline in companies accessing capital markets
o changes in corporate ownership
 Guiding principle: corporate governance policies have an
important role to play in achieving broader economic objectives
with respect to corporate sector sustainability, financial stability,
investor confidence and capital formation.

8. The review of the G20/OECD Principles of Corporate Governance
Priorities
The management of climate change and other environmental, social and governance (ESG) risks
Corporate ownership and increased concentration
The growth of new digital technologies and emerging opportunities and risks
The role of institutional investors and stewardship
Executive remuneration
The role and rights of debtholders in corporate governance
Excessive risk taking in the non-financial corporate sector
The role of board committees
Crisis and risk management
Diversity on boards and in senior management

9. The review of the G20/OECD Principles of Corporate Governance
Roadmap
2022
 February: Terms of Reference finalised and presented to G20
 February, June and November: Committee discussions on revisions
 15-16 July: G20/OECD Corporate Governance Forum (Indonesia)
 Fall: public consultation
2021
 October: OECD Ministers and G20 Leaders “recognise the importance of good
corporate governance frameworks and well-functioning capital markets to
support the recovery and look forward to the review of the G20/OECD Principles
of Corporate Governance”.
2023
 Q2: revised Principles adopted by OECD
 Q3: revised Principles endorsed by G20

10. Annex – Key priorities for the review of the Principles

11. Climate change and corporate governance
BACKGROUND
Annex – Key priorities for the review of the Principles
CLIMATE CHANGE POSES FINANCIALLY MATERIAL RISKS
• 165 jurisdictions have a national plan to reduce GHG emissions in line
with the Paris Agreement. However, their planned combined emissions
reductions by 2030 still fall short of the level needed to limit global warming
to 1.5º C above pre-industrial levels.
• Climate change is considered to be a financially material risk for listed
companies representing 64% of global market capitalisation.
• A growing number of investors consider climate and in general ESG
risks when making investment and engagement decisions.
• Companies use a number of different frameworks and standards to
disclose information on their climate-related and other ESG performance,
risks and strategy. Third-party assurance of this information varies across
companies.
• Executive remuneration plans are linked to ESG performance in
companies representing 27% of global market capitalisation.
• Shareholders are increasingly exercising their rights with respect to
ESG and climate related issues, for instance through filling resolutions for
the adoption of GHG emissions reduction targets, nominating directors
with the main goal of moving the company’s strategy towards a lower
carbon footprint, and litigating on the grounds of inadequate management
of climate risks.
• The G20/OECD Principles of Corporate Governance articulate the need
for robust structures and procedures for risk management, high-quality
disclosure and shareholder rights, including concerning environmental
and social issues.
• The review of the G20/OECD Principles will look at the main implications
of climate change for corporate governance, in particular for shareholders’
rights, corporate disclosure and the responsibilities of companies’ boards.
GROWING NUMBER OF INVESTORS CONSIDER ESG RISKS
Source: OECD Capital Market Series Dataset, FactSet, Thomson Reuters Eikon, Bloomberg, SASB mapping.
Source: Thomson Reuters Eikon, Datastream.
Assets under management of funds labelled as or focusing on ESG and climate
Share of market capitalisation exposed to selected risks to climate (2020)
0
300
600
900
1 200
1 500
1 800
2016 2017 2018 2019 2020 2021
ESG Funds Climate Funds
2021 USD, billions
0%
15%
30%
45%
60%
GHG
Emissions
Energy
Management
Physical
Impacts
of Climate
Change
Water &
Wastewater
Management
Waste &
Hazardous
Materials
Management
Air Quality Ecological
Impacts
OECD United States
Europe Japan
China Rest of the world

12. Digitalisation and corporate governance
BACKGROUND
Annex – Key priorities for the review of the Principles
THE NUMBER OF LISTED COMPANIES IN OECD COUNTRIES IS SHRINKING
• Technological developments and the growth of the digital economy
have profoundly changed the character of corporations, capital markets,
and indeed the structure of the global economy more widely.
• Some technological developments have an effect on corporate
governance, both in terms of its scope and the implementation of policies.
This includes:
o Corporate disclosure and regulatory efficiency
o Remote participation in shareholder meetings
o The role of the board in managing digital security risks
• In many ways, the COVID-19 pandemic has accelerated digitalisation,
notably with respect to virtual shareholder meetings and remote working.
The implications for digital security need to be addressed.
• The number of listed companies in OECD countries has declined
every year since 2008. Some technology solutions have the potential to
make public listing more attractive, e.g. by alleviating regulatory burdens
for smaller companies.
• There are also a number of emerging technology-driven trends in
fundraising and primary equity market functioning. These include e.g.
direct listings and online book building; decentralised finance (DeFi)
platforms; initial coin offerings (ICOs); and equity crowdfunding.
• The review of the G20/OECD Principles of Corporate Governance will look
at the effects of digitalisation on corporate governance and its potential for
improving primary equity market listing conditions.
DIGITALISATION-RELATED RISKS ARE HIGHLY RELEVANT
Source: OECD Capital Market Series dataset.
Source: World Economic Forum Global Risk Report.
Top 5 risks seen as critical threats in coming years
Digital inequality, 38.3%
Cybersecurity failure, 39.0%
Extreme weather events, 52.7%
Livelihood crises, 55.1%
Infectious diseases, 58.0%
Debt crises, 52.3%
Commodity shocks, 52.7%
Price instability, 52.9%
IT infrastructure breakdown, 53.3%
Asset bubble burst, 53.3%
0% 10% 20% 30% 40% 50% 60%
Short-term
(0-2
years)
Medim-term
(3-5
years)
-3000
-2000
-1000
0
1000
2000
3000
'05 '07 '09 '11 '13 '15 '17 '19
Newly listed companies
Delisted companies
Net listings
Newly listed and delisted companies in OECD countries

13. 3
17
6
22
13
12
25
3
45
3
3
7
29
12
6
7
5
6
9
18
13
68
11
37
30
37
11
18
20
20
48
38
34
30
31
0 20 40 60 80 100
United States
Others
Other advanced
Japan
Europe
China
Asia (excl.CN & JP)
Corporations Public sector Strategic individuals
Institutional investors Other free-float
Per cent
Corporate ownership and increased concentration
Annex – Key priorities for the review of the Principles
• Today’s equity markets are experiencing an increase in ownership
concentration in publicly listed companies. The 3 largest owners hold
more than 50% of the equity capital in over 44% of listed companies.
There are three major trends driving up ownership concentration:
o The dominance of company group structures, in particular in
some emerging markets.
o Growing state ownership through various state-controlled
investors.
o The re-concentration of ownership in the hands of large
institutional investors, in particular investors that follow passive
index investment strategies.
• There are large differences across jurisdictions in ownership
concentration and ownership structure.
o Corporations own over 20% of listed equity in most Asian
markets.
o The public sector owns 29% of listed equity in China, 12% in
Asia (excl. China & Japan) and 45% in the category “Other”
markets.
o Institutional investors own 68% of listed equity in the United
States.
• These differences in ownership structures create new challenges for policy
makers to ensure sound market incentives for capital formation and
effective capital allocation.
• The review of the G20/OECD Principles of Corporate Governance will look
at the main trends in listed company ownership structures around the
world and the rise in ownership concentration, and their implications for the
design and implementation of corporate governance regulations.
Note: HK stands for Hong Kong
Source: OECD Capital Market Series dataset, FactSet, Thomson Reuters, Bloomberg.
Investors’ holdings at country / regional level as of end-2020
40
60
80
Russia
Croatia
Lithuania
Indonesia
Chile
Colombia
Turkey
Argentina
Romania
Portugal
Bulgaria
HK
(China)
Poland
Greece
Israel
Austria
Brazil
Mexico
Italy
France
Estonia
Hungary
Germany
India
Slovenia
China
Spain
Belgium
Per cent
Source: OECD Capital Market Series dataset, FactSet, Thomson Reuters, Bloomberg.
Ownership concentration by the top 3 investors at the
company level as of end-2020
BACKGROUND
OWNERSHIP STRUCTURE DIFFERS ACROSS REGIONS
INCREASED OWNERSHIP CONCENTRATION IN LISTED COMPANIES

14. Institutional investors and stewardship
BACKGROUND
Annex – Key priorities for the review of the Principles
INSTITUTIONAL INVESTORS HAVE GROWN SIGNIFICANTLY
• In recent decades, most advanced markets have seen an increase in the
importance of various forms of institutional ownership, replacing direct
ownership by individual households.
• Concentration of ownership by institutional investors is particularly
important in the United States and many European countries, especially in
large listed companies. The three (ten) largest institutional investors
owned 9.3% (15.5%) of global market capitalisation in 2019.
• The popularity of index investment strategies also affects the allocation
of institutional investors’ assets and the ownership structure of listed
companies. Institutional investors tend to allocate their assets to
companies included in an index – normally large companies.
• These developments have resulted in lengthened and increasingly
complex investment chains.
• All this raises the question of whether existing frameworks and
incentives are sufficient to encourage a critical mass of more active
shareholders to play their ownership roles.
• The misalignment of institutional investors’ incentives to engage in
investee companies with the economic interests of their beneficial
owners is a long-standing but increasingly important concern in some
jurisdictions.
• The review of the G20/OECD Principles of Corporate Governance will
focus on the state of shareholder engagement by traditional institutional
investors and various efforts to facilitate or encourage such engagement,
both through regulatory actions and stewardship codes, as well as where
gaps or vulnerabilities in the framework may reside.
INSTITUTIONAL INVESTORS FAVOUR COMPANIES IN LARGE INDICES
Source: OECD Capital Market Series dataset
Source: OECD Capital Market Series dataset, FactSet, Thomson Reuters, Bloomberg, MSCI Constituents Information
(as of December 2020).
Avg. institutional ownership of companies (not) in the MSCI World Index, end-2020
Holdings of the 50 largest institutional investors globally
52
77
39
31
15 16
18
54
29
12
5 7
0%
20%
40%
60%
80%
World United States Europe Japan China Emerging
markets
Index companies
Non-index companies
0
5
10
15
20
25
30
'07 '11 '15 '19
Largest 3 Largest 10 Largest 20 Largest 50
2020 USD, trillions

15. The role and rights of debtholders in corporate governance
BACKGROUND
Annex – Key priorities for the review of the Principles
CREDIT QUALITY OF ISSUANCE HAS DECREASED
• Global non-financial corporate bond issuance has more than doubled
from an average of USD 932 billion between 2000-2007 to
USD 1.99 trillion between 2008-2021.
• At the end of 2021, the total outstanding stock of non-financial corporate
bonds was USD 15.3 trillion, a 118% increase compared to 2008.
• Simultaneously, the credit quality of bonds issued by non-financial
corporations, and the degree of covenant protection for non-investment
grade bonds, have both been decreasing over recent decades.
• In addition to a decrease in the use of covenants, opaquely phrased
covenants offering issuers large flexibility to interpret their own compliance
are also common. This is particularly prominent in the non‐investment
grade bond market.
• In parallel, the use of bonds to finance non-investment activity, notably
shareholder payouts (dividends and share buybacks), has increased
sharply.
• This has an impact both on bondholder rights and on the extent to which
bondholders are involved in corporate governance.
• The G20/OECD Principles of Corporate Governance recognise that the
corporate governance framework should be complemented by efficient
enforcement of creditor rights.
• The review of the G20/OECD Principles of Corporate will look in-depth at
recent developments in e.g. covenant design and disclosure by issuers,
and how they relate to directors’ duties.
CORPORATE BONDS INCREASINGLY FINANCE NON-INVESTMENT ACTIVITY
12
14
16
18
1980 '90 2000 '10 '20
18 (AA-)
16 (A)
14 (BBB+)
12 (BBB-)
16%
IG 20%
47%
Non-IG 33%
0%
10%
20%
30%
40%
50%
60%
2000 '05 '10 '15 '20
Source: OECD Capital Market Series dataset, Thomson Reuters Eikon, Mergent FISD.
Global corporate bond rating index Covenant protection index
Source: OECD Capital Market Series dataset, Bloomberg.
Share of payout-related bonds in non-IG bonds
0%
5%
10%
15%
20%
25%
2000 '05 '10 '15 '19
% in total number of issues
% in total amount issued

16. The role of board-level committees in corporate governance
BACKGROUND
Annex – Key priorities for the review of the Principles
BOARD-LEVEL COMMITTEES ARE REQUIRED/RECOMMENDED IN MOST
JURISDICTIONS
• To fulfil their role of monitoring managerial performance and providing
strategic guidance to the management, boards of directors typically set up
specialised committees.
• Establishing board committees has:
• multiple benefits (in terms of board effectiveness, task allocation
and knowledge specialisation, and accountability of the board);
• but may also have disadvantages and costs (communication
creating silos within the board, information segregation, additional
expenses).
• The COVID-19 pandemic placed boards and their committees under
pressure to adapt companies’ functioning, which in turn has increased
scrutiny of the use and operations of committees.
• Committees are increasingly tasked with considering emerging trends,
including ESG risks, supply chain risks, increased activism and evolving
digital technologies.
• The traditional committees (required by law or recommended by codes)
comprise audit, nomination and remuneration committees. Other
committees such as risk committees or sustainability committees can
support the board in specific tasks.
• The review of the G20/OECD Principles of Corporate Governance will look
at the types and role of board-level committees as well as their contribution
to corporate governance, including in terms of internal functioning,
composition and accountability.
EXPLICIT LEGAL REQUIREMENTS OR RECOMMENDATIONS ON RISK
MANAGEMENT HAVE GROWN SIGNIFICANTLY SINCE THE FINANCIAL CRISIS
Source: OECD (2021), “OECD Corporate Governance Factbook 2021”.
Board-level committees by category and jurisdiction
Board-level committee for risk management
Source: OECD (2021), “OECD Corporate Governance Factbook 2021”.
16
12
45
30
30
5
4
8
0 10 20 30 40 50
Remuneration
Committee
Nomination
Committee
Audit
Committee
Rule/Regulation Code No requirement/recommendation
Number of jurisdictions
24
5
14
14
12
31
0 10 20 30 40 50
Risk management
role of audit
committee
Establishment
of separate
risk committee
Law/regulations Code Others (no rule or n.a.)
Number of jurisdictions

17. Gender diversity on boards and in senior management
BACKGROUND
Annex – Key priorities for the review of the Principles
WOMEN ON BOARDS HAVE INCREASED OVER THE PAST DECADE
• The percentage of women on boards has grown significantly in the last
decade. Still, women continue to comprise less than a quarter of board
members in listed companies globally.
• 13 of 50 jurisdictions surveyed have established mandatory quotas
for female participation on boards of directors, ranging from “at least one”
to 40%, with varying applicability.
• Another 13 jurisdictions have introduced targets in their corporate
governance codes, applicable on a comply-or-explain basis.
• Jurisdictions that have introduced quotas or targets for board composition
in listed companies have achieved a greater level of board gender
diversity than other jurisdictions.
• In 2020, the 13 jurisdictions with binding quotas had 30% of women on
boards on average, while the 13 jurisdictions with voluntary targets had
27% of women on board. The 23 jurisdictions with no provisions in place
had just 18% of women on boards.
• Executive positions on boards are still rarely filled by women, which
has led some jurisdictions to introduce provisions targeting women’s
participation on management boards in recent years.
• A growing number of jurisdictions have established requirements for
reporting on gender diversity policies, women in management and
executive positions, as well as gender pay differences.
• The review of the G20/OECD Principles of Corporate Governance will
examine whether the existing recommendation of the Principles on
ensuring the right mix of background and competences on the board is
sufficient to achieve desired progress.
DIFFERENT POLICIES ACROSS JURISDICTIONS TO IMPROVE GENDER DIVERSITY
Source: OECD
Share of women on boards of listed companies according to policy options, 2010 – 2020
Provisions to disclose data on the gender composition of boards and of senior management
Source: OECD
0%
10%
20%
30%
40%
'10 '12 '14 '16 '18 '20
Quotas Targets No provision
56
22
4
6
40
72
0 20 40 60 80 100
Gender composition of
boards of listed companies
Gender composition
of senior management
Law or regulation Recommendation No provision or N/A
Per cent

18. http://www.oecd.org/corporate
e-mail: CorporateGovernance&CorporateFinance@oecd.org