The OECD said its proposed new corporate governance guidelines would give more power to investors in the appointment of company directors and in the monitoring of executive pay.
The OECD published proposals for new corporate governance principles, which will replace guidelines agreed in 1999. The review of the guidelines follows a number of corporate scandals such as those at Enron, WorldCom and Parmalat.
The OECD said the 1999 principles already cover many of the issues that have been at the centre of the scandals, including recommendations on accounting and audit standards, the independence of board members and the need for boards to act in the interest of the company and the shareholders.
But it said the new draft principles would give investors the right to nominate company directors and a more forceful role in electing them. Under the new principles, shareholders would also be able to express their views about compensation policy for board members and executives and submit questions to auditors.
The new text also calls on institutional investors to disclose their overall voting policies and how they manage material conflicts of interest that may affect the way they exercise key ownership functions, such as voting.
It also identifies the need for effective protection of creditor rights and an efficient system for dealing with corporate insolvency.
And it calls on rating agencies, brokers and other providers of information that could influence investor decisions to disclose conflicts of interest and how they are being managed.