34669 v1 TOOLKIT 2 Developing USER GUIDE Corporate Governance Codes of Best Practice User Guide Global Corporate Governance Forum T O O L K I T 2 Developing Corporate Governance Codes of Best Practice Global Corporate Governance Forum U S E R G U I D E Copyright 2005. For permission to photocopy or reprint, The International Bank for please send a request with complete Reconstruction and Development/ information to: The World Bank The World Bank Permissions Desk 1818 H Street NW Office of the Publisher Washington, DC 20433 1818 H Street NW Washington, DC 20433 All rights reserved. or to: The Copyright Clearance Center, Inc. The findings, interpretations, and 222 Rosewood Drive conclusions expressed in this publication Danvers, MA 01923 should not be attributed in any manner Fax: 978-750-4470. to the World Bank, to its affiliated All queries on rights and licenses organizations, or to members of its including subsidiary rights should be board of Executive Directors or the addressed to: countries they represent. The World The Office of the Publisher Bank does not guarantee the accuracy The World Bank of the data included in this publication 1818 H Street NW and accepts no responsibility for any Washington, DC 20433 consequence of their use. Fax: 202-522-2422. The material in this work is protected by copyright. Copying and/or transmitting portions or all of this work may be a violation of applicable law. The World Bank encourages dissemination of its work and hereby grants permission to the user of this work to copy portions of this work for user’s personal, noncommercial use, without any right to resell, redistribute, or create derivative works herefrom. Any other copying or use of this work requires the express written permission of the World Bank. U S E R G U I D E 1 ood corporate governance makes good, G teams that draft the code need to be handpicked F o r e w o r d hard-nosed business sense. Countries with so that business leaders, regulators such as stock strong corporate governance practices exchanges, professional bodies such as lawyers attract capital. Today’s domestic and international and accountants, labor unions, and organized investors are likely to shy away from countries that do business such as chambers of commerce are all not guarantee investor rights, that do not provide for represented on the committee. adequate corporate disclosure, and that do not ensure sound board practices. Many countries have now adopted corporate governance codes of best practices, but the Whilst globalization of economies has increased, and governance of a company is a dynamic matter. international corporate guidelines have been adopted, A written code of best practice does not become each country has its own values, societal norms, way the law of the Medes and Persians that altereth not. In of doing business, and special circumstances. Thus, to fact, the code must be revisited, improved, and revised guide policymakers, market players, and corporations as the conduct of business changes in response to in adopting sound corporate governance practices at changing mores in society. the local level, every country should endeavor to develop its own corporate governance code. It was In short, the establishment of a code of best practice with this knowledge that the Guidelines for Corporate in a country is a continuous labor of love. It takes time Governance in the Commonwealth were written. and effort, and there have to be willing participants who want to do it in the interests of their country. Of course the principles and guidelines of a country Having regard to international institutional investment code need to follow international governance taking place across an electronic, borderless world, standards. Yet, while applying their minds to however, every country today should endeavor to incorporate international principles, concepts, and establish its own code within the parameters of developments into a country code, crafting internationaly approved principles and guidelines committees must also integrate the special of corporate governance. circumstances that pertain to that country. When developing a corporate governance code, it is preferable to have the support of the government as well as the business community. This does not mean that a corporate governance code should be Mervyn King, Chairman of the King Committee enforced by way of statute, but it does mean that on Corporate Governance, South Africa the code crafting committee and the various task 2 What Corporate governance codes are essential tools for enhancing corporate governance practices at the national level. Their primary role is to raise standards is the and to drive reform efforts. Many developed and developing countries have purpose adopted corporate governance codes of best practice to restore and sustain investor confidence in the wake of a financial crisis or corporate scandals. But of this corporate governance codes also serve as benchmarks for monitoring and toolkit? implementing corporate practices and policies at the company level. This corporate governance reform toolkit emphasizes the purpose and benefits of developing corporate governance codes of best practice. The toolkit focuses on the various steps involved in crafting, disseminating, implementing, monitoring, and reviewing corporate governance codes of best practice. The toolkit aims to provide users with a variety of tools and examples that can help organizations and individuals produce best practice codes to help improve corporate governance practices at the country level. Because corporate governance codes have now been adopted in many countries, this toolkit draws attention to the importance of monitoring, updating, and improving existing codes of best practice. The Global Corporate Governance Forum recognizes that there are many different ways and valid approaches to developing and implementing a corporate governance code. Codes can be successfully initiated by governments, business groups, or regulators. They can be implemented through market pressure, professional organizations, or listing rules. Whatever the chosen approach, it is essential that the code comply with international standards while addressing a country’s specificities and reform needs. This toolkit is divided into two volumes containing, respectively, three and five What is modules. The first volume addresses the rationale for developing a corporate in this governance code of best practice, whereas the second volume focuses on the practical process involved in developing and implementing a code. Toolkit users toolkit? will find guidance on the parties involved in developing a corporate governance code, background materials and recommendations on how to draw up the content of a code, and advice on how to monitor and review existing codes. U S E R G U I D E 3 Who Stakeholders involved in developing, monitoring, and updating a corporate will find governance code this toolkit useful? Although the toolkit provides essential guidance to organizations and individuals developing a corporate governance code for the first time, the methodology and guidance can also help standing corporate governance committees monitor, update, and improve existing corporate governance codes. This toolkit is aimed primarily at: • Corporate governance committees or task forces in the process of developing a corporate governance code of best practices at the country level; • Professional organizations, business associations, and regulators taking the leadership in developing or implementing a corporate governance code of best practice; • Government agencies seeking to improve corporate governance standards and practices at the country level; • Corporate governance committees and organizations monitoring, reviewing, and updating existing corporate governance codes. Public and private organizations and institutions fostering corporate governance reform efforts This toolkit can furthermore be a useful reference for any public or private organization interested or engaged in fostering corporate governance reforms efforts and who might be consulted about or associated with a new corporate governance initiative. These stakeholders may, for example, include policymakers, regulators, professional associations, training organizations, and the media. Development agencies This toolkit can provide useful support to multilateral and bilateral development agencies engaged in funding and supporting local corporate governance reform programs and strengthening corporate governance and disclosure practices at the company level. 4 TOOLKIT 2 Developing Corporate Governance Codes of Best Practice Vo l u m e 1 - Ra t i o n a l e VOLUME 1 Rationale Global C orporate Go v ernance Forum MODULE 1 MODULE 3 Importance Why Codes of Corporate Are Useful Governance Building confidence . . . . . . . . . . . . . . . . . . . p. 37 Preventing financial crisis . . . . . . . . . . . . p. 37 C o n t e n t s Defining corporate governance . . . . . . p. 1 Curbing corporate scandals . . . . . . . . . p. 39 Why is corporate governance Raising standards receiving so much attention? . . . . . . . . . p. 6 and driving reform . . . . . . . . . . . . . . . . . . . . . p. 44 How does corporate governance Building consensus for reform . . . . . . p. 44 affect growth and development? . . . . p. 6 Adapting international standards . . . p. 44 Increased access to financing . . . . . . . . p. 7 Monitoring progress and Higher firm valuation . . . . . . . . . . . . . . . . . . . . p. 9 guiding implementation . . . . . . . . . . . . . . . p. 47 Better operational performance . . . . p. 12 Measuring corporate Reduced risk of financial crises . . . . . p. 14 governance practices . . . . . . . . . . . . . . . . . p. 48 Better relations with Guidance for company codes . . . . . . p. 50 other stakeholders . . . . . . . . . . . . . . . . . . . . . p. 17 MODULE 2 ANNEXES Defining Codes 1 - Further reading . . . . . . . . . . . . . . . . . . . p. 54 of Best Practice 2 – Examples of laws that T o o l k i t affect corporate directors . . . . . . p. 56 Types of best practice codes . . . . . . . p. 21 3 – The German scorecard Codes of best practice for generic approach . . . . . . . . . . . . . . . . . . . . . . . . . . p. 58 business activities . . . . . . . . . . . . . . . . . . . . . p. 21 4 – Summary of General Motors’ Codes of best practice for board guidelines . . . . . . . . . . . . . . . . . p. 60 listed companies . . . . . . . . . . . . . . . . . . . . . . . p. 22 5 – Comparison of selected Codes of best practice for corporate governance codes specific types of companies . . . . . . . . . p. 24 of best practice . . . . . . . . . . . . . . . . . . p. 65 Codes focusing on specific aspects of corporate governance . . p. 25 The environment of codes of best practice . . . . . . . . . . . . . . . . . . . . . . . . p. 27 International standards and guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . p. 29 The status of codes of best practice . . . . . . . . . . . . . . . . . . . . . . . . p. 30 Codes and laws compared . . . . . . . . . . p. 32 Complying with codes . . . . . . . . . . . . . . . . p. 32 U S E R G U I D E 5 TOOLKIT 2 Developing Corporate Governance Codes Vo l u m e 2 - P ro c e s s of Best Practice VOLUME2 Process MODULE 5 Global C orporate Implementing Go v ernance Forum MODULE 3 and M onitoring Consulting Launching and implementing Stakeholders and their the code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 67 level of involvement . . . . . . . . . . . . . . . . . . . . p. 31 Arranging the launch MODULE 1 Engaging stakeholders . . . . . . . . . . . . . . . p. 31 and disseminating the code . . . . . . . . . p. 67 Prioritizing stakeholders . . . . . . . . . . . . . . p. 34 Implementing the code . . . . . . . . . . . . . . . p. 70 Initiating Time and resources . . . . . . . . . . . . . . . . . . . p. 36 Reviewing and updating the code . p. 73 Methods of consultation . . . . . . . . . . . . . p. 37 Keeping the code current . . . . . . . . . . . . p. 73 Initiating and leading the process . . . . p. 1 Consultation tools . . . . . . . . . . . . . . . . . . . . . p. 39 The role of capital market Permanent corporate Consultation events . . . . . . . . . . . . . . . . . . . p. 44 institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 2 governance committees . . . . . . . . . . . . . . p. 75 Raising awareness The role of the government . . . . . . . . . . . p. 3 Measuring the impact of the code . p. 77 through the media . . . . . . . . . . . . . . . . . . . . . p. 47 The role of private organizations Dealing with unsatisfactory results . p. 81 and professional associations . . . . . . . . p. 5 The role of the business community and financial sector . . . . . . . . . . . . . . . . . . . . . p. 7 MODULE 4 ANNEXES Forming the crafting committee . . . . . . p. 8 Researching 1 - Sample tasks for Selecting a chairman . . . . . . . . . . . . . . . . . . . p. 8 Appointing a project manager . . . . . . p. 10 and Drafting a consultant contract . . . . . . . . . . . p. 85 Appointing the 2 – Sample engagement committee’s secretary . . . . . . . . . . . . . . . . p. 12 Researching the content letter for a consultant . . . . . . . . . . . p. 86 Selecting the members of the code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 49 3 – Evaluating the of the committee . . . . . . . . . . . . . . . . . . . . . . . p. 13 Setting up subcommittees committee’s performance . . . . . . p. 88 Hiring consultants and experts . . . . . p. 15 or working groups . . . . . . . . . . . . . . . . . . . . . p. 49 4 – Sample letter for Reviewing international a telephone interview . . . . . . . . . . . p. 89 best practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 51 5 – Specimen letter Assessing the country’s corporate of appreciation . . . . . . . . . . . . . . . . . . . p. 90 governance framework . . . . . . . . . . . . . . . p. 55 6 – Sample press release . . . . . . . . . . . p. 91 MODULE 2 Assessing the country’s corporate 7 – U.K. code of practice governance reform needs . . . . . . . . . . . p. 57 M anaging Drafting and finalizing the code . . . . . p. 59 on consultation . . . . . . . . . . . . . . . . . . . p. 93 8 – The Millstein report (1997) . . . . . p. 99 Selecting the main drafter . . . . . . . . . . . p. 59 9 – Summary of a corporate Getting started . . . . . . . . . . . . . . . . . . . . . . . . . p. 17 Style and format . . . . . . . . . . . . . . . . . . . . . . . p. 60 governance country Developing a master schedule . . . . . . p. 17 Integrating consultation feedback . . p. 62 assessment . . . . . . . . . . . . . . . . . . . . . . p. 102 Developing terms of reference . . . . . . p. 20 Reviewing and 10 –Corporate governance Dealing with difficulties . . . . . . . . . . . . . . . . p. 23 approving the code . . . . . . . . . . . . . . . . . . . p. 65 challenges identified by Dealing with outside resistance . . . . . p. 23 the regional corporate Dealing with internal challenges . . . . p. 26 governance roundtables (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 110 11 –Monitoring and enforcing corporate governance best practices in the United Kingdom . . . . . . . . . . . . . . . . p. 112 12 –The review of the OECD principles of corporate governance . . . . . . . . p. 114 6 S a m p l e S t e p - by - S t e p To o l k i t R o l l o u t STEPS MEETING AGENDA GO TO* POST MEETING ACTIVITIES GO TO* INITIAL The formation of the committee V2M1 SETUP The appointment of the chairman V2M1 The appointment of a project manager V2M1 The appointment of a secretary V2M1 Initial consultation with key stakeholder V2M1 Premeetings and discussions between the chairman V2M1 and individual members of the committee Securing funding and support V2M2 Discuss master schedule V2M2 Finalize detailed master schedule V2M2 1 Agree on the committee’s V2M2 Hire consultant V2M1 terms of reference Consider challenges facing V2M2 Review international best practices V2M4 the committee Consider the target and scope V1M2 Review the country’s current laws, regulations, and V2M4 of the code V2M2 practices Consider implementation V1M2 Review the country’s corporate governance development V2M4 mechanisms and nature of V2M5 needs and priorities the code’s provisions Decide on appointment of V2M1 Issue a press release explaining the process and V2M3 a consultant describing the committee’s terms of reference Agree on initial press release V2M3 Agree on finalized master V2M2 Draft the consultation document V2M3 2 schedule V2M4 Discuss the country’s corporate V2M4 governance needs and priorities Review general research findings V2M4 Agree on broad outline V1M2 Consider methods of consultation V2M3 of the code V2M4 Consider formation of V2M4 subcommittees Evaluate the committee’s work V2M2 and progress Discuss the draft of the V2M3 Finalize consultation document V2M3 3 consultation document V2M4 V2M4 Agree on consultation strategy V2M3 Set up consultation process V2M3 and methods Evaluate the committee’s work V2M2 Start researching specific content of the code V2M4 and progress U S E R G U I D E 7 STEPS MEETING AGENDA GO TO* POST MEETING ACTIVITIES GO TO* 4 Agree on consultation document V2M3 Continue research on specific content of the code V2M4 V2M4 Discuss specific research V2M4 Start consulting with key stakeholders V2M3 findings and content Evaluate the committee’s V2M2 Begin drafting of complete code V2M4 work and progress Discuss consultation feedback V2M4 Continue consulting with key stakeholders V2M3 5 Discuss research findings V2M4 Finalize first draft of the code V2M4 Discuss first full draft of code V2M4 Develop dissemination and implementation strategy V2M5 Evaluate the committee’s work V2M2 and progress Discuss second draft V2M4 Modify second draft V2M4 6 Discuss consultation feedback V2M4 Draft foreword and preamble V2M4 Approve dissemination and V2M5 implementation strategy Evaluate the committee’s work V2M2 and progress Agree on final code V2M4 Final proof reading of code V2M4 7 Agree on dates of launching event V2M5 Arrangement of launch V2M5 Approve design V2M4 Distribution of code V2M5 and format of code Agree on press release V2M5 Liaison with media V2M3 V2M5 Evaluate the committee’s V2M2 Liaison with key stakeholders V2M3 work and progress Assess impact of launch V2M5 Adoption of the code by key stakeholders V2M1 8 V2M5 Agree on time frame and methods V2M5 Integration of recommendations V1M3 to assess the code’s impact into company charters and policies V2M5 Agree on time frame to review V2M5 Integration of selected recommendation into listing rules, V2M3 the code securities regulations, and other laws and regulations V2M5 Final evaluation of the V2M2 Monitoring and measuring the impact of the code V2M5 committee’s work and progress V2M5 Reviewing and updating the code V2M5 *V = Volume / M = Module 8 W h a t t o o l s w i l l yo u f i n d i n t h i s t o o l k i t ? Fu r t h e r r e a d i n g 1 5 M odule tabs Each module is introduced by Volume 1 provides an indicative a color tab that presents the list of readings that further rationale and the key content discuss academic and practical of the module. issues related to this toolkit. 2 Thinking points Quotes Each module features a number of thinking points to help users address key steps in developing, 6 Individual modules include experts’ quotes and extracts from existing corporate governance codes of best implementing, and reviewing a practice. corporate governance code of best practice. 3 7 Examples Annexes This toolkit does not advocate Annexes in each volume provide a one-size-fits-all model. background information and Rather, it provides a menu of samples that can help users in options through examples their practical, step-by-step from around the world, from approach to developing a developing as well as corporate governance code. developed countries. 4 Cross-references 8 CD R O M Each module includes cross- The entire toolkit is contained references to other modules in the CD ROM included in this to direct users to related user guide. topics and guidelines. U S E R G U I D E 9 i n d e x i n d e x AUSTRALIA: V1 (11, 64); V2 (2) MEXICO: V1 (47, 82); V2 (56) BENCHMARKS: V1 (47-51, 57-58) AUSTRIA: V2 (22) NETHERLANDS (THE): (41, 50, 83, CHALLENGES: V2 (23-29, 110-111) 84); V2 (9, 82) ARGENTINA: V1 (28) COMMITTEE MEMBERS: V2 (8-15) NEW ZEALAND: V2 (4) BANGLADESH: V1 (46, 51, 65); V2 COMPLIANCE: V1 (32-35); V2 (22, (6, 16, 25, 27, 45, 53, 61, 70, 71) PAKISTAN: V1 (34); V2 (2) 70-72, 79-80, 82) BELGIUM: V1 (4, 66); V2 (9, 22, 56, PERU: V2 (14) COMPLY OR EXPLAIN: T h e m a t i c C o u n t r y 61, 75) SEE COMPLIANCE PHILIPPINES (THE): V1 (15, 39, 48) BRAZIL: V1 (28, 35, 66, 67): V2 (6, CONSULTANTS: V2 (15-16, 85, 86-87, 32, 54, 68, 69, 74) POLAND: V1 (45); V2 (23, 42, 46, 54, 69, 76) CONSULTATION (METHODS): CANADA: V1 (68, 69); V2 (7, 9, V2 (37-48, 89, 90, 93-98) 76, 80) ROMANIA: V2 (8, CONSULTATION (DOCUMENT): CHINA: V1 (22, 23, 45, 48, 70); V2 RUSSIAN FEDERATION: V1 (22, 30, V2 (39-40, 93-96) (2, 3) 31, 46, 85); V2 (63, 68, 69) CONSULTATION (FEEDBACK): CHILE: V1 (43) SINGAPORE: V1 (43) V2 (62-64, 96) COLOMBIA: V1 (25) SLOVAK REPUBLIC: V2 (2, 7) CRISIS: V1 (37-39); V2 (26) DENMARK: V1 (71); V2 (4, 76, SOUTH AFRICA: V1 (21, 22, 33, 86); DEFINITION (OF CORPORATE 91-92) V2 (9, 10, 21, 42, 50, 56, 63, 68, 69, GOVERNANCE): V1 (1-5) 72, 79, 81) FRANCE: V1 (72, 73, 74); V2 (9) DISSEMINATING: V2 (67-70) SPAIN: V1 (87, 88); V2 (9) GERMANY: V1 (31, 35, 48, 49, 57, EXPOSURE DRAFT: SEE 58, 74); V2 (4, 5, 9, 15, 19, 27, 54, SRI LANKA: V1 (26, 33); V2 (6, 14, 24, CONSULTATION DOCUMENT 70, 75, 76, 80) 46, 77, 82, 85, 86-87, 90) FUNDING: V2 (24-25) HONG KONG (CHINA): V1 (26) SWEDEN: V1 (89) IMPACT ASSESSMENT: V2 (77-83) HUNGARY: V2 (25) SWITZERLAND: V1 (89); V2 (9, 54, 78) MASTER SCHEDULE: V2 (17-19) INDIA: V1 (4, 39, 75); V2 (21, 72, THAILAND: V1, (15, 27, 38, 39) 102-109) MEDIA: V2 (47-48, 68, 77, 91-92) TURKEY: V1 (4, 35, 37, 44); V2 (1, 7, INDONESIA: V1 (15, 39, 48, 76); 40, 42, 55, 77) MONITORING STRUCTURES: V2 V2 (2) (75-77, 112-113) UKRAINE: V1 (31, 45); V2 (15, 24, 47, ITALY: V1 (41, 42, 77): V2 (9) 53) REFORM: V1 (44, 45, 47, 57-59) JAPAN: V1 (78, 79) UNITED KINGDOM: V1 (1, 3, 17, 23, SCANDALS: V1 (6, 39-43) 31, 40, 42, 55, 56, 90, 91); V2 (3, 6, 9, KOREA (REPUBLIC OF): V1 (10, 12, 22, 43, 51, 65, 72, 73, 74, 82, 88, 89, STAKEHOLDERS: V1 (17, 18); V2 (2-8, 15, 30, 38, 39, 81); V2 (4, 19, 25, 42, 93-98, 112-113) 31-37) 54, 63, 75, 76) UNITED STATES: V1 (5, 10, 12, 15, 22, STANDARDS (INTERNATIONAL): V1 KENYA: V1 (4, 25, 80); V2 (45) 24, 34, 41, 42, 59-63, 91); V2 (7) (28-30, 44, 47, 51-55, 73, 99-101) MACEDONIA: V2 (47, 53, 64) ZAMBIA: V1 (30); V2 (55) SUBCOMMITTEES: V2 (49-50) MALAYSIA: V1 (15, 39, 81) TERMS OF REFERENCE: V2 (20-22) 10 To develop this toolkit and gather lessons Country contributors c o n t r i b u t o r s learned from developing and developed countries alike, the Global Corporate Bangladesh Sweden Governance Forum invited corporate Wendy Werner, Bangladesh Peter Sponbergs, Swedish Academy governance reform champions from Enterprise Institute of Directors various regions of the world to share their experiences in developing corporate Brazil Turkey governance codes of best practice. Heloisa Bedicks, Brazilian Institute of Melsa Ararat, Corporate Governance Corporate Governance (IBGC) Forum, Turkey The Forum would especially like to Sandra Guerra, Corporate Performance thank the following people for their Management United K ingdom contribution to this toolkit by providing Sir Adrian Cadbury, Former Chairman of materials, examples, and extensive Canada Cadbury Schweppes plc comments on the milestones and Peter Dey, Osler Hoskin and Harcourt LLP John Plender, Financial Times challenges involved in drafting, Kerrie Waring, Institute of Chartered implementing, and reviewing corporate Germany Accountants in England and Wales governance codes of best practice. Christian Strenger, DWS Investment United States India Holly Gregory, Weil, Sheela Bhide, Former Joint Secretary, Gotshal & Manges LLP International contributors Ministry of Finance and Company Alexandra Lajoux, National Association Affairs of Corporate Directors Teresa Barger, World Bank Group, Ira Millstein, Weil, Gotshal & Manges LLP Washington, D.C. Republic of Korea Alexander Berg, World Bank Group, Hasung Jang, Asian Institute of Uzbekistan Washington, D.C. Corporate Governance – Korea Kahramon Juraboev, Training and Daniel Blume, Organisation for University Consulting Center Economic Co-operation and Sung Wook Joh, Business School – Development, Paris Korea University Zambia David Bernstein, World Bank, Lewis Mosho, Lewis Nathan Advocates Washington, D.C. M exico Stijn Claessens, World Bank, Sam Podolsky, Mexican Institute of Washington, D.C. Corporate Governance (IMGC) Darrin Hartzler, International Finance Corporation, Washington, D.C. Poland Michael Gillibrand, Former Special Advisor, Maciej Dzierzanowski, Gdansk Institute Commonwealth Secretariat, London for Market Economics Ihor Kitela, International Finance Piotr Tamowicz, Polish Forum for Corporation, Kyiv Corporate Governance Natalia Kosheleva, International Finance Corporation, Moscow R ussian Federation Mike Lubrano, International Finance Igor Belikov, Russian Institute of Corporation, Washington, D.C. Directors Tatiana Nenova, World Bank Group, Alexander Ikonnikov, Independent Washington, D.C. Directors Association Motria Onyschuk-Morozov, International Finance Corporation, Kyiv South Africa Djordjija Petkoski, World Bank Institute, Philip Armstrong, ENF Corporate Washington, D.C. Governance David Robinett, World Bank Group, Mervyn King, Brait South Africa Ltd Washington, D.C. Anne Simpson, International Corporate Spain Governance Network, London Alfredo Ibarguen, Advisory & Corporate John Sullivan, Center for International Finance, Interdin Private Enterprise, Washington, D.C. TOOLKIT 2 Developing Corporate Governance Codes of Best Practice Main Authors: Adjith Nivard Cabraal, Cabraal Consulting, Sri Lanka Marie-Laurence Guy, Global Corporate Governance Forum Chris Pierce, Global Governance Services, United Kingdom Editor Marty Gottron, Stockbridge, Massachusetts Graphic design Studio Grafik, Herndon, Virginia Printing Schmitz Press, Sparks, Maryland Global Corporate Governance Forum 2121 Pennsylvania Avenue, NW, Washington DC, 20433 USA http://www.gcgf.org cgsecretariat@ifc.org Co-founded by the World Bank Group and the Organisation for Economic Co- operation and Development, the Global Corporate Governance Forum is an advocate, a supporter, and a disseminator of high standards and practices of corporate governance in developing countries and transition economies. The Forum’s donors include the International Finance Corporation and the governments of France, India, Luxembourg, Norway, Sweden, Switzerland, and the United States. P R I N T E D O N R E C Y C L E D PA P E R