UNCTAD has undertaken various actions to strengthen their regulatory frameworks in order to restore investor confidence as well as enhance corporate transparency and accountability. Accordingly, it has issued 'Guidance on Good Practices in Corporate Governance Disclosure' in 2006 for promoting improved corporate governance standards. This guidance is a voluntary technical aid for, among others, regulators and companies in developing countries and transition economies. Its purpose is to assist the preparers of enterprise reporting in producing disclosures on corporate governance, which will address the major concerns of investors and other stakeholders. This is most relevant for enterprises eager to attract investment, regardless of their legal form or size. This guidance is also useful for promoting awareness in countries and companies that are not sufficiently adhering to international good practices and are consequently failing to satisfy investors’ expectations regarding corporate governance disclosures.

The guidance revisits the content of major corporate governance codes and regulations with a focus on financial disclosures, a range of non-financial disclosures, disclosures in relation to general meetings, the timing and means of disclosures, and the disclosure of the degree of compliance with local or other codes of corporate governance. The recommendations under these guidelines include:-

• One of the major responsibilities of the board of directors is to ensure that shareholders and other stakeholders are provided with high-quality disclosures on the financial and operating results of the entity. The quality of financial disclosure depends significantly on the robustness of the financial reporting standards on the basis of which the financial information is prepared and reported. Thus, the board’s responsibilities and duties regarding financial communications like overseeing the process of producing the financial statements should be disclosed.
• Enterprises should fully disclose significant transactions with related parties. However, in circumstances where the financial reporting requirements are less stringent, as a minimum, the board of directors should provide the following disclosures that are generally considered best-practice: significant related-party transactions and any related-party relationships where control exists; disclosure of the nature, type and elements of the related-party transactions; and related-party relationships where control exists (irrespective of whether there have been transactions with parties under common control). The decision making process for approving related-party transactions should also be disclosed. Members of the board and managers should disclose any material interests in transactions or other matters affecting the company.
• The objectives of the enterprise should be disclosed, such as governance objectives, like 'why does the company exist?', etc. The objectives of enterprises may vary according to the values of society.
• The beneficiary ownership structure of an enterprise is of great importance in an investment decision, especially with regard to the equitable treatment of shareholders, and thus, it should be fully disclosed to all interested parties. Changes in the shareholdings of substantial investors should be disclosed to the market as soon as a company becomes aware of them.
• Disclosure should be made of the control structure and of how shareholders or other members of the organisation can exercise their control rights through voting or other means. Any arrangement under which some shareholders may have a degree of control disproportionate to their equity ownership, whether through differential voting rights, appointment of directors or other mechanisms, should be disclosed. Any specific structures or procedures which are in place to protect the interests of minority shareholders should be disclosed. Rules and procedures governing the acquisition of corporate control in the capital markets and extraordinary transactions such as mergers and sales of substantial portions of corporate assets should be disclosed.
• The composition of the board should be disclosed, in particular the balance of executives and non-executive directors, and whether any of the non-executives have any affiliations (direct or indirect) with the company. The board’s role and functions must be fully disclosed. The existence of an enterprise code of ethics and governance structures should be disclosed. In particular, the board should disclose structures put in place to prevent conflicts between the interests of the directors and management on the one side, and those of shareholders and other stakeholders on the other.
• The composition and functions of any groups or committees, which have been established to facilitate fulfillment of certain of the board’s functions and address some potential conflicts of interest, should be fully disclosed. Committee charters, terms of reference or other company documents outlining the duties and powers of the committee or its members should also be disclosed, including whether or not the committee is empowered to make decisions which bind the board, or whether the committee can only make recommendations to the board.
• The number, type and duties of board positions held by an individual director should be disclosed. An enterprise should also disclose the actual board positions held, and whether or not the enterprise has a policy limiting the number of board positions any one director can hold. There should be sufficient disclosure of the qualifications and biographical information of all board members to assure shareholders and other stakeholders that the members can effectively fulfil their responsibilities. There should also be disclosure of the mechanisms which are in place to act as 'checks and balances' on key individuals in the enterprise. The board should also disclose facilities which may exist to provide members with professional advice as well as whether those facilities have been used during the reporting period.
• The board should disclose whether it has a performance evaluation process in place, either for the board as a whole or for individual members. Disclosure should be made of how the board has evaluated its performance and how the results of the appraisal are being used.
• Directors should disclose the mechanism for setting directors’ remuneration and its structure. A clear distinction should be made between remuneration mechanisms for executive directors and non-executive directors. Disclosure should be comprehensive to demonstrate to shareholders and other stakeholders whether remuneration is tied to the company’s long-term performance as measured by recognized criteria. Information regarding compensation packages should include salary, bonuses, pensions, share payments and all other benefits, financial or otherwise, as well as reimbursed expenses. Where share options for directors are used as incentives but are not disclosed as disaggregated expenses in the accounts, their cost should be fully disclosed using a widely accepted pricing model. The length of directors’ contracts and the termination of service notice requirements, as well as the nature of compensation payable to any director for cancellation of service contract, should be disclosed.
• The board should give appropriate disclosures and assurance regarding its risk management objectives, systems and activities. It should disclose existing provisions for identifying and managing the effects of risk bearing activities. It should report on internal control systems designed to mitigate risks. Such reporting should include risk identification mechanisms.
• The board should disclose that it has confidence that the external auditors are independent and their competency and integrity have not been compromised in any way. The process for the appointment of and interaction with external auditors should be disclosed. Disclosures should cover the selection and approval process for the external auditor, any prescriptive requirements of audit partner rotation, the duration of the current auditor, what percentage of the total fees paid to the auditor involves non-audit work, etc.
• Enterprises should disclose the scope of work and responsibilities of the internal audit function and the highest level within the leadership of the enterprise to which the internal audit function reports. Enterprises with no internal audit function should disclose the reasons for its absence.
• Disclosure should be made of the process for holding and voting at annual general meetings and extraordinary general meetings, as well as all other information necessary for shareholders to participate effectively in such meetings. Notification of the agenda and proposed resolutions should be made in a timely fashion, and be made available in the national language (or one of the official languages) of the enterprise as well as, if appropriate, an internationally used business language. The results of a general meeting should be communicated to all shareholders as soon as possible.
• All material issues relating to corporate governance of the enterprise should be disclosed in a timely fashion. The disclosure should be clear, concise, precise and governed by the 'substance over form' principle. Some issues may require continuous disclosure. Relevant information should be available for users in a cost effective way, preferably through the websites of the relevant government authority, the stock exchange on which the enterprise is listed (if applicable) and the enterprise itself.
• Where there is a local code on corporate governance, enterprises should follow a 'comply or explain' rule whereby they disclose the extent to which they followed the local code's recommendations and explain any deviations. Where there is no local code on corporate governance, companies should follow recognized international good practices. The enterprise should disclose awards or accolades for its good corporate governance practices.

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