The OECD published its draft of the revision of its Principles of Corporate Governance last week.
Sources inform “Globes” that a special inter-ministerial committee has begun studying the Companies Law and other laws and regulations relating to the management and control of private and public companies. The committee intends to ultimately adapt Israeli legislation and regulations to Organization of Economic Cooperation and Development (OECD) standards.
Last week, the OECD published its draft of the revision of its Principles of Corporate Governance. The relevant agencies have begun talks to arrange a visit by top OECD officials to Israel. The delegation will examine existing legislation and regulations and study the changes necessary to bring Israel in line with the new international standards.
The sources said the inter-ministerial committee's work would eventually lead to amendments to the Companies Law, in accordance with OECD requirements. At issue are clauses in which Israel lags behind international standards, although there are areas in which Israel is stricter than the OECD recommendations.
The OECD recommends that investors should have both the right to nominate company directors and a more forceful role in electing them; that rating agencies, brokers and other providers of information that could influence investor decisions to disclose conflicts of interest and how they are being managed; the need for effective protection of creditor rights and an efficient system for dealing with corporate insolvency; the independence of board members and the need for boards to act in the interest of the company and the shareholders; and that boards be more rigorous in disclosing related party transactions.
Published by Globes [online] - www.globes.co.il - on January 20, 2004