The Global Governance Principles (GGPs) were developed in consultation with its members and set out expectations around corporate governance issues that are most likely to influence investment decision-making. The principles are supplemented by ICGN guidance and viewpoint reports on a range of governance themes, and apply to publicly listed companies, non-listed companies and all types of board structure, including one-tier and two-tier arrangements as well as subsidiary companies of groups.

The ICGN Global Governance Principles:

1. Board role and responsibilities

Boards should operate in the company’s long-term best interests for shareholders while considering essential stakeholders. The guidance covers setting corporate purpose, strategy and ESG, emphasising the value of stakeholder engagement, establishing independent committees, and dedicating time.

2. Leadership and independence

There should be a clear division of responsibilities between board and executive roles to avoid unfettered powers of decision-making and in order to protect the interests of shareholders and relevant stakeholders in promoting the long-term success of the company.

3. Composition and appointment

Boards should have a sufficient number of directors with relevant knowledge and industry experience to generate objective decision-making in line with the company’s purpose, long-term strategy, and relevant stakeholders. Teams should also comprise genuine diversity to ensure effective, equitable and inclusive decision-making.

4. Corporate culture

Boards should instil a culture of ethics and integrity consistent with the company’s mission and values, and should strongly advocate anti-corruption, ensure confidential spaces for all stakeholders to raise issues, and develop clear policies and procedures in company concerns and workplace behaviour and conduct.

5. Remuneration

Boards should ensure the company’s strategy and purpose aligns with the interests of all company employees to guarantee long-term value preservation and generation, through thoughtful remuneration planning. Remuneration should be appropriately balanced with the payment of dividends to shareholders and retention of capital for future investment and the level of quantum should be defendable relative to social considerations relating to income inequality.

6. Risk oversight

Boards should be proactive in company changes and transitions and approve the approach to risk management and internal controls, and ensure that the strategy is operating successfully.

7. Corporate reporting

Boards should ensure their shareholders and other interested parties get timely and accurate information on the company’s financial status, performance, business model, long-term prospects, and approach to sustainability in the context of the company’s current and future strategic direction.

8. Internal and external audit

Boards should create comprehensive, independent and effective internal and external audit procedures to ensure the quality and integrity of company reporting.

9. Shareholder rights

Boards should ensure shareholders’ rights are equal and safeguarded to guarantee that shareholders’ voting rights relate to their economic investment and that minority shareholders have voting rights on critical decisions or transactions affecting their interest in the firm.

10. Shareholder meetings

Boards should ensure shareholder meetings are efficient and democratic to facilitate constructive interactivity and accountability around the company’s long-term strategy, performance, and approach to sustainable value creation, all of which may influence voting decisions.

1. The GGPs are reviewed periodically, with this update published in 2021. Since the 2017 publication, this iteration takes account of considerable systemic change affecting companies and investors, including the disruptive effects of the Covid-19 pandemic, social inequalities, technological and digital transformation, and the impact of climate change on the world’s ecology. All changes are summarised in Annex 2.
2. The GGPs should be read alongside the ICGN’s Global Stewardship Principles, which set out best practices in relation to investor governance and stewardship obligations. Together these documents form the core foundation of ICGN’s policy framework and embody ICGNs mission to advance the highest standards of corporate governance and investor stewardship worldwide.
3. The GGPs are intended to be of general application, irrespective of national legislative frameworks or listing rules. As global recommendations, they should be read with an understanding that local regulations and cultural norms may lead to different approaches to governance practices.
4. The GGPs are relevant to a company’s core financial stakeholders, including both bondholders and equity investors. The GPPs focus primarily on areas where shareholder and creditor interests in governance are aligned.
5. Under principle 7, the ICGN encourages boards to provide sustainability reporting by blending financial, human and natural capital considerations, which should support and enhance the information in the financial statements and help investors to form an assessment of the company’s position, performance and long-term prospects.
6. Boards should assess the impact of climate change on the company business model and how it will be adapted to meet the needs of a net zero economy as part of a long-term strategy. This includes setting and disclosing targets to reduce carbon emissions and a period for achievement.
7. The principles set out clear board responsibilities, in that they are accountable to shareholders and relevant stakeholders for preserving and enhancing sustainable value over the long-term in alignment with a company’s purpose and long-term strategy.
8. Boards are accountable for the governance of sustainability ensuring the integration of human capital (particularly the workforce) and natural capital management in strategy, innovation and risk.
9. This report emphasises that companies must manage effectively the governance, social and environmental aspects of its activities as well as financial operations, and therefore highlights these as key considerations for investors, financiers and insurers when working with, and within companies.