TUAC recommendations to OECD work on corporate governance

On 15 April 2019, TUAC took part into the discussions of the OECD Committee on Corporate Governance. TUAC shared the following submission, key policy messages being:

• During a roundtable on climate-related financial disclosures, TUAC underlined the importance of taking into account exposure of workers to transition risks;
• On duties and responsibilities in company groups, TUAC encouraged the Corporate Governance Committee to collect information on how different OECD countries regulate the accountability of a parent company for activities carried by subsidiaries. There should also be a review of the various degrees in which OECD countries regulate the establishment of shell entities for the purpose of regulatory arbitrage (letterbox practices). Finally, it would be useful to collect information and transparency & reporting practices, as well as relationships with employees throughout the group;
• On workers’ participation, TUAC urged the Corporate Governance Committee to undertake an in-depth review of existing regulations and practices, including an assessment of their impact on the economic performance and sustainability of companies;
• TUAC commented on a recent OECD report on corporate debt vulnerabilities. There are lessons to be learned on how current quantitative easing is delivering unconditional support to financial markets. From a corporate governance perspective, the Committee should reflect on long-term business models that ensure that corporate finance effectively transforms into long-term productive assets;
• On state ownership, TUAC highlighted the specific nature of SOEs performing essential missions of general interest and renewed its call for a full assessment of the consequences of public-private partnerships on fiscal management and human rights;
• Finally, TUAC called on the OECD to take a more critical approach to the unaccountable corporate governance practices that prevail in digital businesses.