SlideShare a Scribd company logo
New Approaches to Economic Challenges
Friday 10 January 2014

Corporate Governance,
Value Creation and Growth
Corporate Governance Committee
Mats Isaksson
Corporate Affairs Division, OECD
Background Reports
• The Bridge Between Finance and Enterprise
• Who Cares ? Corporate Governance in
Today’s Equity Markets
• Institutional Investors as Owners: Who Are
they and What Do They Do
• Making Stock Markets Work to Support
Economic Growth
• Corporate Governance and Emerging
Markets

2
Corporate Governance: a multifaceted issue

• Business Level Dimension
• Public Policy Dimension

3
The Public Policy Dimension

“…to contribute to economic efficiency,
sustainable growth and financial stability”
(CGC mandate from Council)

4
Corporate governance policies shall:
• Facilitate the process of channelling savings into
equity capital and productive investments.
• Provide households with opportunities to hold
equity and participate in the profits and wealth
creation of the private sector.
• Ensure that promising business ventures get
access to equity capital.
• Build trust and confidence in stock markets.

5
So…
• What makes equity capital (or stocks) so
different from other types of capital?
• What are the criteria for an efficient stock
market?

6
Equity
• The only standardized financial
instrument that can support
entrepreneurial uncertainty.

• It is “eternal” and doesn’t demand a fixed
return (as opposed to bonds and loans).
• A necessary cornerstone for raising
additional capital.
7
What we should expect from stock markets

• Serve as venue where growth companies
effectively can access equity capital.
• Produce information from many
independent sources so that capital is
allocated effectively among competing
ends.

• Engage shareholders in the monitoring of
corporate performance.
8
OECD countries: IPO numbers and volume

Source: OECD calculations, based on data from Thomson Reuters New Issues Database, Datastream, stock
exchanges’ and companies’ websites.

•
•
•
•

Downward since 1990’s. Both in numbers and volume.
“Recovery” before the financial crisis.
Average annual Volume 1993-2000: USD 134.3 bn
Average annual Volume 2001-2012: USD 69.8 bn
9
Number of listed companies

Source: World Bank World Development Indicators

• Some of the largest OECD stock markets have lost half of
their publicly listed companies in the last 10 years.

10
• But the amount of capital and investment
is not the whole story.
• Equally important for economic growth is
how the money is allocated and how the
use of the money is monitored.

(These were the second and third stock
market functions on my list.)
11
Financial assets under collective management has
doubled in the last decade

Source: OECD Institutional Investors Database

•

Assets under management has more than doubled in the last decade. 2000:
36 trillion, 2011: 73,4 trillion
12
What do institutional investors do when they
invest in stocks?

• Increase in indexing (play safe – collect fees)
• Exchange traded funds (increased in volume by
• 1 500 % in last decade)
• High Frequency Trading (where the fast beat the
smart)

• Co-location (jump the queue)
13
What do institutional investors do when they
monitor the companies they own?

Option 1: Abstain from voting
Option 2: Minimize costs by outsourcing

ISS has 1 700 institutions as clients

They cover 40 000 shareholder meetings

They cover 100 countries

160 researcher

14
Complexity – the case of CalPERS

Source: CalPERS Comprehensive Annual Financial Report, Financial Year Ended June 30, 2012
and CalPERs Annual Investment Report, Financial Year Ended June 30, 2012,

15
Emerging Policy Concern #1
Decreased trust in stock markets

Source: The Chicago Booth/Kellogg School Financial Trust Index

16
Emerging Policy Concern #2

• Uneven playing field for households to
participate in the profits and wealth
creation in the private sector.
At a time when policies encourage increased
personal responsibility for retirement
savings.

17
Emerging Policy Concern #3

• Reduced access to risk capital for growth
companies that are costly to evaluate and
of little interest for indexed investors,
ETFs, high frequency traders and stock
exchanges.
Average size of IPOs has doubled, from USD
123m to USD 259m
18
Emerging Policy Concern #4
Share of US companies 5 years or younger

Source: U.S. Department of Commerce

•
•

Lack of equity can mean less opportunities to develop and grow
independently
On average, Google has acquired more than one company every
week since 2010 (Business Insider).

19
Thank you for your attention!

20

More Related Content

What's hot

A survey of private equity investments in kenya
A survey of private equity investments in kenyaA survey of private equity investments in kenya
A survey of private equity investments in kenya
Alexander Decker
 
IE Business School
IE Business SchoolIE Business School
IE Business School
Chandni Kundra
 
Role of Investment Banks in the Financial Crisis of 2008
Role of Investment Banks in the Financial Crisis of 2008Role of Investment Banks in the Financial Crisis of 2008
Role of Investment Banks in the Financial Crisis of 2008
Mujtaba Zeeshan
 
Management
ManagementManagement
Management
Toma Leonheart
 
Lecture6
Lecture6Lecture6
Introduction to Managerial Finance - Chapter 1 by: Scott Besley & Eugene Brigham
Introduction to Managerial Finance - Chapter 1 by: Scott Besley & Eugene BrighamIntroduction to Managerial Finance - Chapter 1 by: Scott Besley & Eugene Brigham
Introduction to Managerial Finance - Chapter 1 by: Scott Besley & Eugene Brigham
Kenji Silavi
 
Market Outlook: Hedge Funds 2017 – Discover the Changing Outlook
Market Outlook: Hedge Funds 2017 – Discover the Changing OutlookMarket Outlook: Hedge Funds 2017 – Discover the Changing Outlook
Market Outlook: Hedge Funds 2017 – Discover the Changing Outlook
FIS
 
Financing Small Snterprises what Role for Microfinance
Financing Small Snterprises what Role for MicrofinanceFinancing Small Snterprises what Role for Microfinance
Financing Small Snterprises what Role for Microfinance
Dr Lendy Spires
 
CORPORATE FINANCE
CORPORATE FINANCECORPORATE FINANCE
CORPORATE FINANCE
CHARAK RAY
 
Cairn Cross at Vermont Venture Network January 2014
Cairn Cross at Vermont Venture Network January 2014Cairn Cross at Vermont Venture Network January 2014
Cairn Cross at Vermont Venture Network January 2014
vtcairncross
 
EY-Banking-in-emerging-markets-Investing-for-success
EY-Banking-in-emerging-markets-Investing-for-successEY-Banking-in-emerging-markets-Investing-for-success
EY-Banking-in-emerging-markets-Investing-for-success
Karl Meekings
 
Stanford CS 007-07: Personal Finance for Engineers / Good Investing is Boring
Stanford CS 007-07: Personal Finance for Engineers / Good Investing is BoringStanford CS 007-07: Personal Finance for Engineers / Good Investing is Boring
Stanford CS 007-07: Personal Finance for Engineers / Good Investing is Boring
Adam Nash
 
LF1672146
LF1672146LF1672146
LF1672146
Stefano Valeri
 
07. the determinants of capital structure
07. the determinants of capital structure07. the determinants of capital structure
07. the determinants of capital structure
nguyenviet30
 
What are keiretsu
What are keiretsuWhat are keiretsu
What are keiretsu
IDBI Capital
 
Introduction ot Mangerial Finance - Chapter 2 by: Scott Besley & Eugene Brigham
Introduction ot Mangerial Finance - Chapter 2 by: Scott Besley & Eugene BrighamIntroduction ot Mangerial Finance - Chapter 2 by: Scott Besley & Eugene Brigham
Introduction ot Mangerial Finance - Chapter 2 by: Scott Besley & Eugene Brigham
Kenji Silavi
 
Funding Sme – The Challenges And Risk Within - Mezzanine Financing - Part - 8
Funding Sme – The Challenges And Risk Within - Mezzanine Financing - Part - 8Funding Sme – The Challenges And Risk Within - Mezzanine Financing - Part - 8
Funding Sme – The Challenges And Risk Within - Mezzanine Financing - Part - 8
Resurgent India
 

What's hot (17)

A survey of private equity investments in kenya
A survey of private equity investments in kenyaA survey of private equity investments in kenya
A survey of private equity investments in kenya
 
IE Business School
IE Business SchoolIE Business School
IE Business School
 
Role of Investment Banks in the Financial Crisis of 2008
Role of Investment Banks in the Financial Crisis of 2008Role of Investment Banks in the Financial Crisis of 2008
Role of Investment Banks in the Financial Crisis of 2008
 
Management
ManagementManagement
Management
 
Lecture6
Lecture6Lecture6
Lecture6
 
Introduction to Managerial Finance - Chapter 1 by: Scott Besley & Eugene Brigham
Introduction to Managerial Finance - Chapter 1 by: Scott Besley & Eugene BrighamIntroduction to Managerial Finance - Chapter 1 by: Scott Besley & Eugene Brigham
Introduction to Managerial Finance - Chapter 1 by: Scott Besley & Eugene Brigham
 
Market Outlook: Hedge Funds 2017 – Discover the Changing Outlook
Market Outlook: Hedge Funds 2017 – Discover the Changing OutlookMarket Outlook: Hedge Funds 2017 – Discover the Changing Outlook
Market Outlook: Hedge Funds 2017 – Discover the Changing Outlook
 
Financing Small Snterprises what Role for Microfinance
Financing Small Snterprises what Role for MicrofinanceFinancing Small Snterprises what Role for Microfinance
Financing Small Snterprises what Role for Microfinance
 
CORPORATE FINANCE
CORPORATE FINANCECORPORATE FINANCE
CORPORATE FINANCE
 
Cairn Cross at Vermont Venture Network January 2014
Cairn Cross at Vermont Venture Network January 2014Cairn Cross at Vermont Venture Network January 2014
Cairn Cross at Vermont Venture Network January 2014
 
EY-Banking-in-emerging-markets-Investing-for-success
EY-Banking-in-emerging-markets-Investing-for-successEY-Banking-in-emerging-markets-Investing-for-success
EY-Banking-in-emerging-markets-Investing-for-success
 
Stanford CS 007-07: Personal Finance for Engineers / Good Investing is Boring
Stanford CS 007-07: Personal Finance for Engineers / Good Investing is BoringStanford CS 007-07: Personal Finance for Engineers / Good Investing is Boring
Stanford CS 007-07: Personal Finance for Engineers / Good Investing is Boring
 
LF1672146
LF1672146LF1672146
LF1672146
 
07. the determinants of capital structure
07. the determinants of capital structure07. the determinants of capital structure
07. the determinants of capital structure
 
What are keiretsu
What are keiretsuWhat are keiretsu
What are keiretsu
 
Introduction ot Mangerial Finance - Chapter 2 by: Scott Besley & Eugene Brigham
Introduction ot Mangerial Finance - Chapter 2 by: Scott Besley & Eugene BrighamIntroduction ot Mangerial Finance - Chapter 2 by: Scott Besley & Eugene Brigham
Introduction ot Mangerial Finance - Chapter 2 by: Scott Besley & Eugene Brigham
 
Funding Sme – The Challenges And Risk Within - Mezzanine Financing - Part - 8
Funding Sme – The Challenges And Risk Within - Mezzanine Financing - Part - 8Funding Sme – The Challenges And Risk Within - Mezzanine Financing - Part - 8
Funding Sme – The Challenges And Risk Within - Mezzanine Financing - Part - 8
 

Viewers also liked

Sustavno vodjenje LLP stucno usavrsavanje ozujak 2014
Sustavno vodjenje LLP stucno usavrsavanje ozujak 2014Sustavno vodjenje LLP stucno usavrsavanje ozujak 2014
Sustavno vodjenje LLP stucno usavrsavanje ozujak 2014
Dragana Kupres
 
сталинградская битва гуз
сталинградская битва гузсталинградская битва гуз
сталинградская битва гуз
Dima Mursatov
 
Question3
Question3Question3
Question3
Shahbano Munir
 
Presentation1
Presentation1Presentation1
Presentation1
Shahbano Munir
 
Template Buyer Persona
Template Buyer PersonaTemplate Buyer Persona
Template Buyer Persona
Ruben Lozano Me
 
Presentation23
Presentation23Presentation23
Presentation23
Shahbano Munir
 
Emeralddeleeuw round3-complio
Emeralddeleeuw round3-complioEmeralddeleeuw round3-complio
Emeralddeleeuw round3-complio
Complio
 
Presentation1
Presentation1Presentation1
Presentation1
Shahbano Munir
 
Recovered file 1
Recovered file 1Recovered file 1
Recovered file 1
Shahbano Munir
 
2013.11.03 - NAEC Seminar_OECD Forecasts during and after the crisis
2013.11.03 - NAEC Seminar_OECD Forecasts during and after the crisis2013.11.03 - NAEC Seminar_OECD Forecasts during and after the crisis
2013.11.03 - NAEC Seminar_OECD Forecasts during and after the crisis
OECD_NAEC
 

Viewers also liked (11)

Sustavno vodjenje LLP stucno usavrsavanje ozujak 2014
Sustavno vodjenje LLP stucno usavrsavanje ozujak 2014Sustavno vodjenje LLP stucno usavrsavanje ozujak 2014
Sustavno vodjenje LLP stucno usavrsavanje ozujak 2014
 
Guida rapida di dropbox
Guida rapida di dropboxGuida rapida di dropbox
Guida rapida di dropbox
 
сталинградская битва гуз
сталинградская битва гузсталинградская битва гуз
сталинградская битва гуз
 
Question3
Question3Question3
Question3
 
Presentation1
Presentation1Presentation1
Presentation1
 
Template Buyer Persona
Template Buyer PersonaTemplate Buyer Persona
Template Buyer Persona
 
Presentation23
Presentation23Presentation23
Presentation23
 
Emeralddeleeuw round3-complio
Emeralddeleeuw round3-complioEmeralddeleeuw round3-complio
Emeralddeleeuw round3-complio
 
Presentation1
Presentation1Presentation1
Presentation1
 
Recovered file 1
Recovered file 1Recovered file 1
Recovered file 1
 
2013.11.03 - NAEC Seminar_OECD Forecasts during and after the crisis
2013.11.03 - NAEC Seminar_OECD Forecasts during and after the crisis2013.11.03 - NAEC Seminar_OECD Forecasts during and after the crisis
2013.11.03 - NAEC Seminar_OECD Forecasts during and after the crisis
 

Similar to 2014.01.10 - NAEC Seminar_Fostering long-term investment (Presentation 1)

Princeton ethics in finance 2013 session 6 -- ethics of investing
Princeton ethics in finance 2013 session 6 -- ethics of investingPrinceton ethics in finance 2013 session 6 -- ethics of investing
Princeton ethics in finance 2013 session 6 -- ethics of investing
asoni98
 
Socially Responsible Investing - SoJust ProfDev August 2014
Socially Responsible Investing - SoJust ProfDev August 2014Socially Responsible Investing - SoJust ProfDev August 2014
Socially Responsible Investing - SoJust ProfDev August 2014
Robbie Samuels
 
MF0016
MF0016MF0016
MF0016
Ekta Doger
 
Corporate Governance Trends, Regulatory Changes & their Impact on Investment ...
Corporate Governance Trends, Regulatory Changes & their Impact on Investment ...Corporate Governance Trends, Regulatory Changes & their Impact on Investment ...
Corporate Governance Trends, Regulatory Changes & their Impact on Investment ...
OTC Markets Group Inc.
 
Mridul arora final paper deloitte banking and finance
Mridul arora final paper deloitte banking and financeMridul arora final paper deloitte banking and finance
Mridul arora final paper deloitte banking and finance
Mridul Arora
 
Futures in Finance 18 10 14 Equity Research session
Futures in Finance 18 10 14 Equity Research sessionFutures in Finance 18 10 14 Equity Research session
Futures in Finance 18 10 14 Equity Research session
IntellisysUK
 
VENTURE CAPITAL .ppt
VENTURE CAPITAL .pptVENTURE CAPITAL .ppt
VENTURE CAPITAL .ppt
Vikrant Vikram Singh
 
Dimension Mill Annual Presentation
Dimension Mill Annual PresentationDimension Mill Annual Presentation
Dimension Mill Annual Presentation
Dimension Mill
 
Global Trends in Regulation
Global Trends in RegulationGlobal Trends in Regulation
Global Trends in Regulation
NICSA
 
Bcu msc cg week 11 leadership 260812
Bcu msc cg week 11 leadership 260812Bcu msc cg week 11 leadership 260812
Bcu msc cg week 11 leadership 260812
Stephen Ong
 
Ar csr 2014 presentation
Ar csr 2014 presentationAr csr 2014 presentation
Ar csr 2014 presentation
Capitakenya
 
Corporate Websites through the Eyes of an Investor. Republic of Tajikistan
Corporate Websites through the Eyes of an Investor. Republic of TajikistanCorporate Websites through the Eyes of an Investor. Republic of Tajikistan
Corporate Websites through the Eyes of an Investor. Republic of Tajikistan
Александр Никишев
 
Socially Responsible Investing (SoJust ProfDev)
Socially Responsible Investing (SoJust ProfDev)Socially Responsible Investing (SoJust ProfDev)
Socially Responsible Investing (SoJust ProfDev)
Robbie Samuels
 
Ch08 mish11 embfm
Ch08 mish11 embfmCh08 mish11 embfm
Ch08 mish11 embfm
Rob Sears
 
Role of stock exchange
Role of stock exchangeRole of stock exchange
Role of stock exchange
parkerkevin
 
Using Crowd-Centric Alternative Assets to Enhance Portfolio Yield
Using Crowd-Centric Alternative Assets to Enhance Portfolio YieldUsing Crowd-Centric Alternative Assets to Enhance Portfolio Yield
Using Crowd-Centric Alternative Assets to Enhance Portfolio Yield
Dara Albright
 
A project report on e i-c analysis of capital goods sector at kotak mahindra
A project report on e i-c analysis of capital goods sector at kotak mahindraA project report on e i-c analysis of capital goods sector at kotak mahindra
A project report on e i-c analysis of capital goods sector at kotak mahindra
Babasab Patil
 
Wanjiru Silvana
Wanjiru SilvanaWanjiru Silvana
Advisor portal emerging trends
Advisor portal emerging trendsAdvisor portal emerging trends
Advisor portal emerging trends
NIIT Technologies
 
Chapter 1 on Valuation and Reporting in Organization
Chapter 1 on Valuation and Reporting in OrganizationChapter 1 on Valuation and Reporting in Organization
Chapter 1 on Valuation and Reporting in Organization
Firdaus Fitri Zainal Abidin
 

Similar to 2014.01.10 - NAEC Seminar_Fostering long-term investment (Presentation 1) (20)

Princeton ethics in finance 2013 session 6 -- ethics of investing
Princeton ethics in finance 2013 session 6 -- ethics of investingPrinceton ethics in finance 2013 session 6 -- ethics of investing
Princeton ethics in finance 2013 session 6 -- ethics of investing
 
Socially Responsible Investing - SoJust ProfDev August 2014
Socially Responsible Investing - SoJust ProfDev August 2014Socially Responsible Investing - SoJust ProfDev August 2014
Socially Responsible Investing - SoJust ProfDev August 2014
 
MF0016
MF0016MF0016
MF0016
 
Corporate Governance Trends, Regulatory Changes & their Impact on Investment ...
Corporate Governance Trends, Regulatory Changes & their Impact on Investment ...Corporate Governance Trends, Regulatory Changes & their Impact on Investment ...
Corporate Governance Trends, Regulatory Changes & their Impact on Investment ...
 
Mridul arora final paper deloitte banking and finance
Mridul arora final paper deloitte banking and financeMridul arora final paper deloitte banking and finance
Mridul arora final paper deloitte banking and finance
 
Futures in Finance 18 10 14 Equity Research session
Futures in Finance 18 10 14 Equity Research sessionFutures in Finance 18 10 14 Equity Research session
Futures in Finance 18 10 14 Equity Research session
 
VENTURE CAPITAL .ppt
VENTURE CAPITAL .pptVENTURE CAPITAL .ppt
VENTURE CAPITAL .ppt
 
Dimension Mill Annual Presentation
Dimension Mill Annual PresentationDimension Mill Annual Presentation
Dimension Mill Annual Presentation
 
Global Trends in Regulation
Global Trends in RegulationGlobal Trends in Regulation
Global Trends in Regulation
 
Bcu msc cg week 11 leadership 260812
Bcu msc cg week 11 leadership 260812Bcu msc cg week 11 leadership 260812
Bcu msc cg week 11 leadership 260812
 
Ar csr 2014 presentation
Ar csr 2014 presentationAr csr 2014 presentation
Ar csr 2014 presentation
 
Corporate Websites through the Eyes of an Investor. Republic of Tajikistan
Corporate Websites through the Eyes of an Investor. Republic of TajikistanCorporate Websites through the Eyes of an Investor. Republic of Tajikistan
Corporate Websites through the Eyes of an Investor. Republic of Tajikistan
 
Socially Responsible Investing (SoJust ProfDev)
Socially Responsible Investing (SoJust ProfDev)Socially Responsible Investing (SoJust ProfDev)
Socially Responsible Investing (SoJust ProfDev)
 
Ch08 mish11 embfm
Ch08 mish11 embfmCh08 mish11 embfm
Ch08 mish11 embfm
 
Role of stock exchange
Role of stock exchangeRole of stock exchange
Role of stock exchange
 
Using Crowd-Centric Alternative Assets to Enhance Portfolio Yield
Using Crowd-Centric Alternative Assets to Enhance Portfolio YieldUsing Crowd-Centric Alternative Assets to Enhance Portfolio Yield
Using Crowd-Centric Alternative Assets to Enhance Portfolio Yield
 
A project report on e i-c analysis of capital goods sector at kotak mahindra
A project report on e i-c analysis of capital goods sector at kotak mahindraA project report on e i-c analysis of capital goods sector at kotak mahindra
A project report on e i-c analysis of capital goods sector at kotak mahindra
 
Wanjiru Silvana
Wanjiru SilvanaWanjiru Silvana
Wanjiru Silvana
 
Advisor portal emerging trends
Advisor portal emerging trendsAdvisor portal emerging trends
Advisor portal emerging trends
 
Chapter 1 on Valuation and Reporting in Organization
Chapter 1 on Valuation and Reporting in OrganizationChapter 1 on Valuation and Reporting in Organization
Chapter 1 on Valuation and Reporting in Organization
 

More from OECD_NAEC

2014.11.28 - NAEC Group Meeting_Stefano Scarpetta
2014.11.28 - NAEC Group Meeting_Stefano Scarpetta2014.11.28 - NAEC Group Meeting_Stefano Scarpetta
2014.11.28 - NAEC Group Meeting_Stefano Scarpetta
OECD_NAEC
 
2014.11.28 - NAEC Group Meeting_Lamia Kamal-Chaoui
2014.11.28 - NAEC Group Meeting_Lamia Kamal-Chaoui2014.11.28 - NAEC Group Meeting_Lamia Kamal-Chaoui
2014.11.28 - NAEC Group Meeting_Lamia Kamal-Chaoui
OECD_NAEC
 
2014.11.28 - NAEC Group Meeting_DSG Tamaki
2014.11.28 - NAEC Group Meeting_DSG Tamaki2014.11.28 - NAEC Group Meeting_DSG Tamaki
2014.11.28 - NAEC Group Meeting_DSG Tamaki
OECD_NAEC
 
2014.11.28 - NAEC Group Meeting_Shardul agrawala
2014.11.28 - NAEC Group Meeting_Shardul agrawala2014.11.28 - NAEC Group Meeting_Shardul agrawala
2014.11.28 - NAEC Group Meeting_Shardul agrawala
OECD_NAEC
 
2014.11.28 - NAEC Group Meeting_Adrian Blundell-Wignall
2014.11.28 - NAEC Group Meeting_Adrian Blundell-Wignall2014.11.28 - NAEC Group Meeting_Adrian Blundell-Wignall
2014.11.28 - NAEC Group Meeting_Adrian Blundell-Wignall
OECD_NAEC
 
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 5_Paul Ormerod
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 5_Paul Ormerod2014.12.01 - NAEC-Strategic Foresight Workshop_Session 5_Paul Ormerod
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 5_Paul Ormerod
OECD_NAEC
 
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 3_Wim Thomas
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 3_Wim Thomas2014.12.01 - NAEC-Strategic Foresight Workshop_Session 3_Wim Thomas
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 3_Wim Thomas
OECD_NAEC
 
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 6_Diana Mangalagiu
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 6_Diana Mangalagiu2014.12.01 - NAEC-Strategic Foresight Workshop_Session 6_Diana Mangalagiu
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 6_Diana Mangalagiu
OECD_NAEC
 
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 4_Wim Thomas
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 4_Wim Thomas2014.12.01 - NAEC-Strategic Foresight Workshop_Session 4_Wim Thomas
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 4_Wim Thomas
OECD_NAEC
 
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 2_Esther Eidinow
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 2_Esther Eidinow2014.12.01 - NAEC-Strategic Foresight Workshop_Session 2_Esther Eidinow
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 2_Esther Eidinow
OECD_NAEC
 
2014.11.27 - NAEC Seminar_Currency-based measures codes
2014.11.27 - NAEC Seminar_Currency-based measures codes2014.11.27 - NAEC Seminar_Currency-based measures codes
2014.11.27 - NAEC Seminar_Currency-based measures codes
OECD_NAEC
 
2014.11.20 - NAEC Seminar - Microstability
2014.11.20 - NAEC Seminar - Microstability2014.11.20 - NAEC Seminar - Microstability
2014.11.20 - NAEC Seminar - Microstability
OECD_NAEC
 
2014.11.Microstability naec20nov2014 print version
2014.11.Microstability naec20nov2014 print version2014.11.Microstability naec20nov2014 print version
2014.11.Microstability naec20nov2014 print version
OECD_NAEC
 
2014.10.21 - NAEC Seminar_Skills-Inequality-Well-being
2014.10.21 - NAEC Seminar_Skills-Inequality-Well-being2014.10.21 - NAEC Seminar_Skills-Inequality-Well-being
2014.10.21 - NAEC Seminar_Skills-Inequality-Well-being
OECD_NAEC
 
2014.10.10 - NAEC Seminar_Identifying Social and Emotional Skills
2014.10.10 - NAEC Seminar_Identifying Social and Emotional Skills2014.10.10 - NAEC Seminar_Identifying Social and Emotional Skills
2014.10.10 - NAEC Seminar_Identifying Social and Emotional Skills
OECD_NAEC
 
Naec 29 9-2014 helm
Naec 29 9-2014 helmNaec 29 9-2014 helm
Naec 29 9-2014 helm
OECD_NAEC
 
Naec 29 9-2014 ilmola risk resilience
Naec 29 9-2014 ilmola risk resilienceNaec 29 9-2014 ilmola risk resilience
Naec 29 9-2014 ilmola risk resilience
OECD_NAEC
 
Naec 29 9-2014 jacobzone
Naec 29 9-2014 jacobzoneNaec 29 9-2014 jacobzone
Naec 29 9-2014 jacobzone
OECD_NAEC
 
2014.09.22 - NAEC Seminar_Origins of the crisis
2014.09.22 - NAEC Seminar_Origins of the crisis2014.09.22 - NAEC Seminar_Origins of the crisis
2014.09.22 - NAEC Seminar_Origins of the crisis
OECD_NAEC
 
2014_09_19_NAEC Seminar_How good is your job
2014_09_19_NAEC Seminar_How good is your job2014_09_19_NAEC Seminar_How good is your job
2014_09_19_NAEC Seminar_How good is your job
OECD_NAEC
 

More from OECD_NAEC (20)

2014.11.28 - NAEC Group Meeting_Stefano Scarpetta
2014.11.28 - NAEC Group Meeting_Stefano Scarpetta2014.11.28 - NAEC Group Meeting_Stefano Scarpetta
2014.11.28 - NAEC Group Meeting_Stefano Scarpetta
 
2014.11.28 - NAEC Group Meeting_Lamia Kamal-Chaoui
2014.11.28 - NAEC Group Meeting_Lamia Kamal-Chaoui2014.11.28 - NAEC Group Meeting_Lamia Kamal-Chaoui
2014.11.28 - NAEC Group Meeting_Lamia Kamal-Chaoui
 
2014.11.28 - NAEC Group Meeting_DSG Tamaki
2014.11.28 - NAEC Group Meeting_DSG Tamaki2014.11.28 - NAEC Group Meeting_DSG Tamaki
2014.11.28 - NAEC Group Meeting_DSG Tamaki
 
2014.11.28 - NAEC Group Meeting_Shardul agrawala
2014.11.28 - NAEC Group Meeting_Shardul agrawala2014.11.28 - NAEC Group Meeting_Shardul agrawala
2014.11.28 - NAEC Group Meeting_Shardul agrawala
 
2014.11.28 - NAEC Group Meeting_Adrian Blundell-Wignall
2014.11.28 - NAEC Group Meeting_Adrian Blundell-Wignall2014.11.28 - NAEC Group Meeting_Adrian Blundell-Wignall
2014.11.28 - NAEC Group Meeting_Adrian Blundell-Wignall
 
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 5_Paul Ormerod
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 5_Paul Ormerod2014.12.01 - NAEC-Strategic Foresight Workshop_Session 5_Paul Ormerod
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 5_Paul Ormerod
 
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 3_Wim Thomas
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 3_Wim Thomas2014.12.01 - NAEC-Strategic Foresight Workshop_Session 3_Wim Thomas
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 3_Wim Thomas
 
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 6_Diana Mangalagiu
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 6_Diana Mangalagiu2014.12.01 - NAEC-Strategic Foresight Workshop_Session 6_Diana Mangalagiu
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 6_Diana Mangalagiu
 
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 4_Wim Thomas
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 4_Wim Thomas2014.12.01 - NAEC-Strategic Foresight Workshop_Session 4_Wim Thomas
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 4_Wim Thomas
 
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 2_Esther Eidinow
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 2_Esther Eidinow2014.12.01 - NAEC-Strategic Foresight Workshop_Session 2_Esther Eidinow
2014.12.01 - NAEC-Strategic Foresight Workshop_Session 2_Esther Eidinow
 
2014.11.27 - NAEC Seminar_Currency-based measures codes
2014.11.27 - NAEC Seminar_Currency-based measures codes2014.11.27 - NAEC Seminar_Currency-based measures codes
2014.11.27 - NAEC Seminar_Currency-based measures codes
 
2014.11.20 - NAEC Seminar - Microstability
2014.11.20 - NAEC Seminar - Microstability2014.11.20 - NAEC Seminar - Microstability
2014.11.20 - NAEC Seminar - Microstability
 
2014.11.Microstability naec20nov2014 print version
2014.11.Microstability naec20nov2014 print version2014.11.Microstability naec20nov2014 print version
2014.11.Microstability naec20nov2014 print version
 
2014.10.21 - NAEC Seminar_Skills-Inequality-Well-being
2014.10.21 - NAEC Seminar_Skills-Inequality-Well-being2014.10.21 - NAEC Seminar_Skills-Inequality-Well-being
2014.10.21 - NAEC Seminar_Skills-Inequality-Well-being
 
2014.10.10 - NAEC Seminar_Identifying Social and Emotional Skills
2014.10.10 - NAEC Seminar_Identifying Social and Emotional Skills2014.10.10 - NAEC Seminar_Identifying Social and Emotional Skills
2014.10.10 - NAEC Seminar_Identifying Social and Emotional Skills
 
Naec 29 9-2014 helm
Naec 29 9-2014 helmNaec 29 9-2014 helm
Naec 29 9-2014 helm
 
Naec 29 9-2014 ilmola risk resilience
Naec 29 9-2014 ilmola risk resilienceNaec 29 9-2014 ilmola risk resilience
Naec 29 9-2014 ilmola risk resilience
 
Naec 29 9-2014 jacobzone
Naec 29 9-2014 jacobzoneNaec 29 9-2014 jacobzone
Naec 29 9-2014 jacobzone
 
2014.09.22 - NAEC Seminar_Origins of the crisis
2014.09.22 - NAEC Seminar_Origins of the crisis2014.09.22 - NAEC Seminar_Origins of the crisis
2014.09.22 - NAEC Seminar_Origins of the crisis
 
2014_09_19_NAEC Seminar_How good is your job
2014_09_19_NAEC Seminar_How good is your job2014_09_19_NAEC Seminar_How good is your job
2014_09_19_NAEC Seminar_How good is your job
 

Recently uploaded

Storm surge expected along the coastline of South Africa:
Storm surge expected along the coastline of South Africa:Storm surge expected along the coastline of South Africa:
Storm surge expected along the coastline of South Africa:
SABC News
 
Team BTeam Building Leadership Skills Education_ A Pathway to Success.pdf
Team BTeam Building Leadership Skills Education_ A Pathway to Success.pdfTeam BTeam Building Leadership Skills Education_ A Pathway to Success.pdf
Team BTeam Building Leadership Skills Education_ A Pathway to Success.pdf
tewhimanshu23
 
Booklet - LGBTQ in Asia Human Rights Overview.pdf
Booklet - LGBTQ in Asia Human Rights Overview.pdfBooklet - LGBTQ in Asia Human Rights Overview.pdf
Booklet - LGBTQ in Asia Human Rights Overview.pdf
NurisHisyam
 
Mazam-Ali-FT-Order-29-12-2023.pdfjp;dkpkpoerwk
Mazam-Ali-FT-Order-29-12-2023.pdfjp;dkpkpoerwkMazam-Ali-FT-Order-29-12-2023.pdfjp;dkpkpoerwk
Mazam-Ali-FT-Order-29-12-2023.pdfjp;dkpkpoerwk
bhavenpr
 
07072024_First India Newspaper Jaipur.pdf
07072024_First India Newspaper Jaipur.pdf07072024_First India Newspaper Jaipur.pdf
07072024_First India Newspaper Jaipur.pdf
FIRST INDIA
 
Cyber Security Aspect of the 2024 NATO Summit
Cyber Security Aspect of the 2024 NATO SummitCyber Security Aspect of the 2024 NATO Summit
Cyber Security Aspect of the 2024 NATO Summit
SOCRadar
 
Know More About Bruce Wilpon Wife, Yuki Ikeda
Know More About Bruce Wilpon Wife, Yuki IkedaKnow More About Bruce Wilpon Wife, Yuki Ikeda
Know More About Bruce Wilpon Wife, Yuki Ikeda
Book My Blogs
 
Кабмін забронював від мобілізації всіх співробітників 133 громадських організ...
Кабмін забронював від мобілізації всіх співробітників 133 громадських організ...Кабмін забронював від мобілізації всіх співробітників 133 громадських організ...
Кабмін забронював від мобілізації всіх співробітників 133 громадських організ...
dynamo777
 
1(14). NIS English January 16-31 (2021).pdf
1(14). NIS English January 16-31 (2021).pdf1(14). NIS English January 16-31 (2021).pdf
1(14). NIS English January 16-31 (2021).pdf
Ranjan Kumar Gupta
 
They Are the Racists _ Andy Blumenthal _ The Blogs.pdf
They Are the Racists _ Andy Blumenthal _ The Blogs.pdfThey Are the Racists _ Andy Blumenthal _ The Blogs.pdf
They Are the Racists _ Andy Blumenthal _ The Blogs.pdf
Andy (Avraham) Blumenthal
 
1(17). NIS English March 1-15 (2021).pdf
1(17). NIS English March 1-15 (2021).pdf1(17). NIS English March 1-15 (2021).pdf
1(17). NIS English March 1-15 (2021).pdf
Ranjan Kumar Gupta
 
Storm surge expected along the coastline of South Africa
Storm surge expected along the coastline of South AfricaStorm surge expected along the coastline of South Africa
Storm surge expected along the coastline of South Africa
SABC News
 
1(11). NIS English December1-15 (2020).pdf
1(11). NIS English December1-15 (2020).pdf1(11). NIS English December1-15 (2020).pdf
1(11). NIS English December1-15 (2020).pdf
Ranjan Kumar Gupta
 
Muslim can never become a majority in India
Muslim can never become a majority in IndiaMuslim can never become a majority in India
Muslim can never become a majority in India
Ajay Prakash
 
1(18). NIS English March16-31 (2021).pdf
1(18). NIS English March16-31 (2021).pdf1(18). NIS English March16-31 (2021).pdf
1(18). NIS English March16-31 (2021).pdf
Ranjan Kumar Gupta
 
The Philippines and its relationship with China
The Philippines and its relationship with ChinaThe Philippines and its relationship with China
The Philippines and its relationship with China
DavidLloyd298843
 
1(15). NIS English February1-15 (2021).pdf
1(15). NIS English February1-15 (2021).pdf1(15). NIS English February1-15 (2021).pdf
1(15). NIS English February1-15 (2021).pdf
Ranjan Kumar Gupta
 
TISS-WS-alumni-Statement.pdffbnikiudhiuh
TISS-WS-alumni-Statement.pdffbnikiudhiuhTISS-WS-alumni-Statement.pdffbnikiudhiuh
TISS-WS-alumni-Statement.pdffbnikiudhiuh
bhavenpr
 
Amish-Devgan-v.-Union-of-India-2021-1-SCC-1.pdf
Amish-Devgan-v.-Union-of-India-2021-1-SCC-1.pdfAmish-Devgan-v.-Union-of-India-2021-1-SCC-1.pdf
Amish-Devgan-v.-Union-of-India-2021-1-SCC-1.pdf
bhavenpr
 
The times are a-changin’: Assessing the political and economic outlook for th...
The times are a-changin’: Assessing the political and economic outlook for th...The times are a-changin’: Assessing the political and economic outlook for th...
The times are a-changin’: Assessing the political and economic outlook for th...
ResolutionFoundation
 

Recently uploaded (20)

Storm surge expected along the coastline of South Africa:
Storm surge expected along the coastline of South Africa:Storm surge expected along the coastline of South Africa:
Storm surge expected along the coastline of South Africa:
 
Team BTeam Building Leadership Skills Education_ A Pathway to Success.pdf
Team BTeam Building Leadership Skills Education_ A Pathway to Success.pdfTeam BTeam Building Leadership Skills Education_ A Pathway to Success.pdf
Team BTeam Building Leadership Skills Education_ A Pathway to Success.pdf
 
Booklet - LGBTQ in Asia Human Rights Overview.pdf
Booklet - LGBTQ in Asia Human Rights Overview.pdfBooklet - LGBTQ in Asia Human Rights Overview.pdf
Booklet - LGBTQ in Asia Human Rights Overview.pdf
 
Mazam-Ali-FT-Order-29-12-2023.pdfjp;dkpkpoerwk
Mazam-Ali-FT-Order-29-12-2023.pdfjp;dkpkpoerwkMazam-Ali-FT-Order-29-12-2023.pdfjp;dkpkpoerwk
Mazam-Ali-FT-Order-29-12-2023.pdfjp;dkpkpoerwk
 
07072024_First India Newspaper Jaipur.pdf
07072024_First India Newspaper Jaipur.pdf07072024_First India Newspaper Jaipur.pdf
07072024_First India Newspaper Jaipur.pdf
 
Cyber Security Aspect of the 2024 NATO Summit
Cyber Security Aspect of the 2024 NATO SummitCyber Security Aspect of the 2024 NATO Summit
Cyber Security Aspect of the 2024 NATO Summit
 
Know More About Bruce Wilpon Wife, Yuki Ikeda
Know More About Bruce Wilpon Wife, Yuki IkedaKnow More About Bruce Wilpon Wife, Yuki Ikeda
Know More About Bruce Wilpon Wife, Yuki Ikeda
 
Кабмін забронював від мобілізації всіх співробітників 133 громадських організ...
Кабмін забронював від мобілізації всіх співробітників 133 громадських організ...Кабмін забронював від мобілізації всіх співробітників 133 громадських організ...
Кабмін забронював від мобілізації всіх співробітників 133 громадських організ...
 
1(14). NIS English January 16-31 (2021).pdf
1(14). NIS English January 16-31 (2021).pdf1(14). NIS English January 16-31 (2021).pdf
1(14). NIS English January 16-31 (2021).pdf
 
They Are the Racists _ Andy Blumenthal _ The Blogs.pdf
They Are the Racists _ Andy Blumenthal _ The Blogs.pdfThey Are the Racists _ Andy Blumenthal _ The Blogs.pdf
They Are the Racists _ Andy Blumenthal _ The Blogs.pdf
 
1(17). NIS English March 1-15 (2021).pdf
1(17). NIS English March 1-15 (2021).pdf1(17). NIS English March 1-15 (2021).pdf
1(17). NIS English March 1-15 (2021).pdf
 
Storm surge expected along the coastline of South Africa
Storm surge expected along the coastline of South AfricaStorm surge expected along the coastline of South Africa
Storm surge expected along the coastline of South Africa
 
1(11). NIS English December1-15 (2020).pdf
1(11). NIS English December1-15 (2020).pdf1(11). NIS English December1-15 (2020).pdf
1(11). NIS English December1-15 (2020).pdf
 
Muslim can never become a majority in India
Muslim can never become a majority in IndiaMuslim can never become a majority in India
Muslim can never become a majority in India
 
1(18). NIS English March16-31 (2021).pdf
1(18). NIS English March16-31 (2021).pdf1(18). NIS English March16-31 (2021).pdf
1(18). NIS English March16-31 (2021).pdf
 
The Philippines and its relationship with China
The Philippines and its relationship with ChinaThe Philippines and its relationship with China
The Philippines and its relationship with China
 
1(15). NIS English February1-15 (2021).pdf
1(15). NIS English February1-15 (2021).pdf1(15). NIS English February1-15 (2021).pdf
1(15). NIS English February1-15 (2021).pdf
 
TISS-WS-alumni-Statement.pdffbnikiudhiuh
TISS-WS-alumni-Statement.pdffbnikiudhiuhTISS-WS-alumni-Statement.pdffbnikiudhiuh
TISS-WS-alumni-Statement.pdffbnikiudhiuh
 
Amish-Devgan-v.-Union-of-India-2021-1-SCC-1.pdf
Amish-Devgan-v.-Union-of-India-2021-1-SCC-1.pdfAmish-Devgan-v.-Union-of-India-2021-1-SCC-1.pdf
Amish-Devgan-v.-Union-of-India-2021-1-SCC-1.pdf
 
The times are a-changin’: Assessing the political and economic outlook for th...
The times are a-changin’: Assessing the political and economic outlook for th...The times are a-changin’: Assessing the political and economic outlook for th...
The times are a-changin’: Assessing the political and economic outlook for th...
 

2014.01.10 - NAEC Seminar_Fostering long-term investment (Presentation 1)

  • 1. New Approaches to Economic Challenges Friday 10 January 2014 Corporate Governance, Value Creation and Growth Corporate Governance Committee Mats Isaksson Corporate Affairs Division, OECD
  • 2. Background Reports • The Bridge Between Finance and Enterprise • Who Cares ? Corporate Governance in Today’s Equity Markets • Institutional Investors as Owners: Who Are they and What Do They Do • Making Stock Markets Work to Support Economic Growth • Corporate Governance and Emerging Markets 2
  • 3. Corporate Governance: a multifaceted issue • Business Level Dimension • Public Policy Dimension 3
  • 4. The Public Policy Dimension “…to contribute to economic efficiency, sustainable growth and financial stability” (CGC mandate from Council) 4
  • 5. Corporate governance policies shall: • Facilitate the process of channelling savings into equity capital and productive investments. • Provide households with opportunities to hold equity and participate in the profits and wealth creation of the private sector. • Ensure that promising business ventures get access to equity capital. • Build trust and confidence in stock markets. 5
  • 6. So… • What makes equity capital (or stocks) so different from other types of capital? • What are the criteria for an efficient stock market? 6
  • 7. Equity • The only standardized financial instrument that can support entrepreneurial uncertainty. • It is “eternal” and doesn’t demand a fixed return (as opposed to bonds and loans). • A necessary cornerstone for raising additional capital. 7
  • 8. What we should expect from stock markets • Serve as venue where growth companies effectively can access equity capital. • Produce information from many independent sources so that capital is allocated effectively among competing ends. • Engage shareholders in the monitoring of corporate performance. 8
  • 9. OECD countries: IPO numbers and volume Source: OECD calculations, based on data from Thomson Reuters New Issues Database, Datastream, stock exchanges’ and companies’ websites. • • • • Downward since 1990’s. Both in numbers and volume. “Recovery” before the financial crisis. Average annual Volume 1993-2000: USD 134.3 bn Average annual Volume 2001-2012: USD 69.8 bn 9
  • 10. Number of listed companies Source: World Bank World Development Indicators • Some of the largest OECD stock markets have lost half of their publicly listed companies in the last 10 years. 10
  • 11. • But the amount of capital and investment is not the whole story. • Equally important for economic growth is how the money is allocated and how the use of the money is monitored. (These were the second and third stock market functions on my list.) 11
  • 12. Financial assets under collective management has doubled in the last decade Source: OECD Institutional Investors Database • Assets under management has more than doubled in the last decade. 2000: 36 trillion, 2011: 73,4 trillion 12
  • 13. What do institutional investors do when they invest in stocks? • Increase in indexing (play safe – collect fees) • Exchange traded funds (increased in volume by • 1 500 % in last decade) • High Frequency Trading (where the fast beat the smart) • Co-location (jump the queue) 13
  • 14. What do institutional investors do when they monitor the companies they own? Option 1: Abstain from voting Option 2: Minimize costs by outsourcing  ISS has 1 700 institutions as clients  They cover 40 000 shareholder meetings  They cover 100 countries  160 researcher 14
  • 15. Complexity – the case of CalPERS Source: CalPERS Comprehensive Annual Financial Report, Financial Year Ended June 30, 2012 and CalPERs Annual Investment Report, Financial Year Ended June 30, 2012, 15
  • 16. Emerging Policy Concern #1 Decreased trust in stock markets Source: The Chicago Booth/Kellogg School Financial Trust Index 16
  • 17. Emerging Policy Concern #2 • Uneven playing field for households to participate in the profits and wealth creation in the private sector. At a time when policies encourage increased personal responsibility for retirement savings. 17
  • 18. Emerging Policy Concern #3 • Reduced access to risk capital for growth companies that are costly to evaluate and of little interest for indexed investors, ETFs, high frequency traders and stock exchanges. Average size of IPOs has doubled, from USD 123m to USD 259m 18
  • 19. Emerging Policy Concern #4 Share of US companies 5 years or younger Source: U.S. Department of Commerce • • Lack of equity can mean less opportunities to develop and grow independently On average, Google has acquired more than one company every week since 2010 (Business Insider). 19
  • 20. Thank you for your attention! 20