Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation - the board, managers, employees, shareholders and other stakeholders. It also spells out the rules and procedures for making decisions on corporate affairs. In so doing, corporate governance also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance.

The OECD Principles of Corporate Governance (1999) represent the first initiative by an inter-governmental organization to develop core elements of a good corporate governance regime.

The Principles are non-binding, and are used as a benchmark by governments to evaluate and improve their legal, institutional, and regulatory frameworks and to provide guidance to stock exchanges, investors, corporations, and other parties that have a role in the process of developing good corporate governance. In this way the Principles form part of a broader effort to promote increased transparency, integrity, and the rule of law. The Principles were updated in 2004.

At the behest of the Group of Seven (G7), the OECD's Principles were adopted by the Financial Stability Forum as 1 of 12 key codes to strengthen national financial systems.

Also at the urging of the G7, the World Bank and the International Monetary Fund also adopted the Principles. Countries' implementation of the Principles are now assessed pursuant to these institutions' Reports on the Observance of Standards and Codes ("ROSC" program).

The United States supports the effort to develop an appropriate methodology to apply the Principles. Currently, the OECD, with U.S. backing, is working to promote the Guidelines throughout the developed and developing world through regional roundtables, seminars, and diagnostic work.

Roundtables in Latin America and Asia took place in 2005, with the expectation that they will be repeated. A working group on Corporate Governance is also included in the Middle East North Africa (MENA) initiative, and was a highlight of the recent MENA Investment Ministerial in Amman, Jordan.