An important question to consider is 'Will the same way of managing companies be the best method for all
companies?' The answer is likely to be no. Companies are different from each other, and globally, they operate
in different legal systems with different institutions, frameworks and traditions. It would not be possible to
construct one single way of operating companies that could be described as good practice for all.
The key issue in corporate governance is that 'a high degree of priority [is] placed on the interests of
shareholders, who place their trust in corporations to use their investment funds wisely and effectively'.
Shareholders in a company might be a family, they might be the general public or they might be
institutional investors representing, in particular, people's future pensions. These shareholders will vary in
their degree of interaction with the company and their directors.
In the context of this great variety in the basic element of these companies, the Organisation for Economic
Co-operation and Development (OECD) has established a number of Principles of Corporate Governance,
which were issued in 1999 and reviewed in 2004, and which serve as a reference point for countries (to
develop corporate governance codes if they wish) and companies. They were developed in response to a
mandate given to the OECD to develop a set of standards and guidelines on good corporate governance.