Leaders of the G20 nations agreed on a global approach to the governance of executive pay in the financial sector at their recent summit in Pittsburgh, but that does not mean compliance professionals can ignore the national-level requirements that many countries are introducing, according to law firm Freshfields Bruckhaus Deringer.
Some observers have criticized the standards that the G20 adopted, complaining that they simply reflect best practice, but a global framework of governance, disclosure, and transparency principles is sorely needed, Freshfields argues in a briefing note.
In the months since the financial crisis peaked, governments and regulators around the world have been drafting national rules aimed at tackling excessive risk taking and rewards for failure. While a globally agreed approach to executive pay might consign those initiatives to history—especially for firms operating across borders—“in practice, national requirements are always going to remain relevant,” Freshfields says.
The firm's briefing note outlines the main principles adopted by the G20 and looks at how they compare with national initiatives in the U.K., France, Germany, and the Netherlands.
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