Oecd legal Instruments

V.D.3. 
Monitoring the effectiveness of the company’s governance practices and making changes 
as needed. 
Monitoring of governance by the board includes continuous review of the internal structure of the company 
to ensure that there are clear lines of accountability for management throughout the organisation. Such 
monitoring should also include whether the company’s governance framework remains appropriate in light 
of material changes to the company’s size, complexity, business strategy, markets, and regulatory 
requirements. In addition to requiring the monitoring and disclosure of corporate governance practices on a 
regular basis, at least in summary form, many jurisdictions have moved to recommend, or indeed mandate, 
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assessment by boards of their performance and of the performance of their committees, individual board 
members, the chair and the CEO. 
V.D.4. 
Selecting, overseeing and monitoring the performance of key executives, and, when 
necessary, replacing them and overseeing succession planning. 
The board should oversee the performance of key executives and monitor that their actions are consistent 
with the strategy and policies approved by the board. The board should select the CEO and may select other 
key executives. In exercising this fundamental function, the board may be assisted by a nomination 
committee which may be tasked with defining the profiles of the CEO and board members, and making 
recommendations to the board on their appointment. Many jurisdictions require or recommend that all or a 
majority of members of the nomination committee be independent directors. The nomination committee may 
also help guide talent management and review policies related to the selection of key executives. In most 
two-tier board systems, the supervisory board is responsible for appointing the management board which 
normally comprises most of the key executives. The board should also be responsible for succession 
planning for the CEO and may also be for other key executives, with a view to ensuring business continuity. 
While comprising contingency mechanisms, succession planning could also be a long-term strategic tool to 
support talent development and diversity.