Fundamentals of Risk Management

Corporate governance model
341
The principles require the equitable treatment of all stakeholders and an influential 
role for stakeholders in corporate governance. Finally, the principles require dis-
closure and transparency. All of these principles are delivered by the board of the 
organization and the principles, therefore, make detailed reference to the responsi-
bilities of the board.
There have been a number of standards published recently on corporate governance 
and British Standards has recently published BS 13500:2013 ‘Code of practice for 
delivering effective governance of organizations’. When it published the standard, 
British Standards commented that: ‘It is increasingly obvious that society’s expectations 
of organizational behaviours and performance, and thus: “governance”, are rising. 
This rise in expectations is partly in response to a steady flow of major incidents and 
perceived abuses of authority.’
The approach in BS 13500 is based on the evidence that good governance promotes 
success of organizations and society. Therefore, the scope of the code goes beyond 
TAbLE 
28.1
OECD principles of corporate governance
i. effective corporate 
governance framework
Promote transparent and fair markets, efficient 
allocation of resources and be consistent with the 
rule of law and support effective supervision and 
enforcement
ii. rights and equitable 
treatment of 
shareholders
Protect and facilitate the exercise of shareholder 
rights and ensure equitable treatment of all 
shareholders, including minority and foreign 
shareholders
iii. institutional investors, 
stock markets and other 
intermediaries
Sound incentives throughout the investment chain 
and provide for stock markets to function in a way 
that contributes to good corporate governance