PracticeConsultingFears of multinational abuses lead OECD to issue toughest guidance for 25 years

Fears of multinational abuses lead OECD to issue toughest guidance for 25 years

The OECD is leading a crackdown on the freedom of multinationals with new draft guidance, issued today, which is designed to promote modern corporate governance, financial disclosure and employee relations around the world.

The paper follows discussions with the OECD’s 29 member countries and three other countries – Argentina, Brazil and Chile, that have adopted the guidelines as they stand at present.

But the new text, which is split into ten sections, has been formulated in reaction to the rapid evolution in the structure of multinational enterprises which has given rise to fears regarding its impact on jobs, wages, the environment, taxation and other issues.

The draft text, released under the responsibility of OECD secretary general Donald Johnston, states that: ‘there is sometimes a perception that the operation of multinational enterprises – whose size may be large in relation to host country economies – generate abuses of concentrations of economic or political power or conflicts with national policy objectives and expectations.’

The guidance highlights the benefits of timely disclosure and the application of high quality standards for disclosure, accounting and audit.

The latter will send a warning message to Big Five firms which have been accused in the past of adhering to national accounting practices, particularly in developing countries, rather than trying to adopt best practice throughout their offices.

This was underlined by World Bank vice president Jules Muis as an important factor in the recent economic crashes in East Asia and the bank has been working closely with the OECD to develop improved corporate governance, based on sound accounting practice.

Responses to the draft text are requested by 15 February 2000.

The US is beefing up its corporate governance rules, but where is the UK ?

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer