What is an essential principle of the OECD Principles of Corporate Governance?

What is an essential principle of the OECD Principles of Corporate Governance?

• A. Promotion of secrecy in corporate transactions
• B. Encouragement of risk-taking without oversight
• C. Protection and facilitation of shareholder rights
• D. Minimization of regulatory compliance programs

Answer: (C)

The essential principle of the OECD Principles of Corporate Governance emphasizes the protection and facilitation of shareholder rights. This principle is fundamental because it ensures that shareholders can participate effectively in the governance of the company. It highlights the importance of transparency and accountability, allowing shareholders to have access to pertinent information about the company's performance and decisions. When shareholder rights are protected, it enables them to contribute to decision-making processes and hold management accountable for their actions. This principle fosters trust and enhances the overall integrity of the corporate governance framework, ultimately leading to better business practices and sustainable economic growth. Protecting shareholder rights also encourages investment by instilling confidence that their interests will be safeguarded, which is vital for the long-term success of any corporation.

The essential principle of the OECD Principles of Corporate Governance emphasizes the protection and facilitation of shareholder rights. This principle is fundamental because it ensures that shareholders can participate effectively in the governance of the company. It highlights the importance of transparency and accountability, allowing shareholders to have access to pertinent information about the company's performance and decisions.

When shareholder rights are protected, it enables them to contribute to decision-making processes and hold management accountable for their actions. This principle fosters trust and enhances the overall integrity of the corporate governance framework, ultimately leading to better business practices and sustainable economic growth. Protecting shareholder rights also encourages investment by instilling confidence that their interests will be safeguarded, which is vital for the long-term success of any corporation.