World Movement for Democracy - Inaugural Assembly Report

Building the World Movement for Democracy

Inaugural World Assembly
February 14-17, 1999
New Delhi, India

Report Home

World Movement for Democracy

Founding Statement

Democracy as a Universal Value - Keynote Address by Amartya Sen

Plenary 1:
Democracy & Development
Plenary 2:
Democracy & Diversity
Plenary 3:
Challenges of Democratic Governance

Greetings

Workshops:
New Communications Technologies
Democracy & NGOs
Political Parties & Democracy
Policy Research Institutes & Democracy
Trade Unions & Democracy in a Changing Global Economy
Civic Education & Democracy
Democracy Assistance Foundations
Democracy & Market Institutions
Transparency & Accountability
Informal Workshop Reports

Conference Views
Participants
Media
Agenda
Biographies

Democracy & Market Institutions: Corporate Governance
Workshop Leaders: Omkar Goswami and John D. Sullivan

Condensed from report by Tibor Vidos

This conference addressed many important issues relating to democracy and the development of open and pluralistic political systems. But the principles of self-governance and transparency apply equally to another institution of democracy and market systems--namely, the corporation. Businesses--like governments--must be governed by a set of rules in order to ensure that they reflect the public interest and that of their shareholders. They also must adapt to changing political and economic environments both domestically and globally. These rules of the game for business are known generically as corporate governance, which is now becoming an important dimension of the reform efforts of developed and transition economies alike.

Transparency is a common denominator for the interests both of those who seek to reform governmental institutions and those concerned with the private sector. The current Asian economic crisis can be described as a crisis of confidence in these institutions caused by opaque decision-making processes and transactions made with little or no public scrutiny. Fair market systems cannot function and the public cannot exercise its democratic rights unless information affecting the public interest is made available. Thus corporate disclosure and public accountability are necessary elements of democratic reform. Countries that ignore or lag behind in corporate governance reform will rapidly find themselves at a competitive disadvantage vis-à-vis more progressive nations in attracting long-term capital for development.

Specific needs:

Corporate governance is a relatively new issue and not widely acknowledged nor understood. Thus public education efforts are needed to promote understanding of corporate governance principles and their relationship to democratic development.
Means of mobilizing companies to undertake voluntary reforms are needed. Progressive business associations can play a key role by developing suggested codes of conduct and best practices and suggesting that they be adopted by their members.
Mechanisms are needed to identify independent non-executive company directors with diverse talents and experience, including women and others who are often excluded.
Concerted efforts need to be made to reform economic systems to create open markets in place of crony or corporate capitalist systems through improved corporate governance legislation. These include requirements for: internationally accepted accounting principles, standards of disclosure, anti-conflict of interest, anti-trust, prohibitions on insider trading and reform of bankruptcy laws.

Proposed initiatives:

CIPE will encourage its global network of business associations to become more proactive in promoting corporate governance principles.

CIPE will further integrate training on corporate governance issues and best practices into its business association management training programs.

Associations, think tanks and other concerned institutions will make available links on their websites to information related to corporate governance.

Model surveys of outside directors to identify diverse blends of skills will be conducted in various countries to create models for other countries.

Information and educational materials will be created including manuals, handbooks, voluntary codes of conduct and other technical materials--to be disseminated both through print and electronic media (Internet/websites).