A/HRC/32/45 Enterprises, for instance, consider corporate governance important for the implementation of responsible business conduct principles and standards. The recommendations on disclosure and transparency are very similar in both guidelines and explicitly aligned in relation to stakeholder relations. The OECD Guidelines on Corporate Governance of StateOwned Enterprises provide that: “State ownership policy should fully recognize SOEs’ (State-owned enterprises) responsibilities towards stakeholders …. It should make clear any expectations the State has in respect of responsible business conduct by SOEs. … SOEs should observe high standards of responsible business conduct” (chap. V). 41. From an operational perspective, the corporate governance framework offers a useful anchor for implementing human rights requirements and is often already available at the national level. Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. 26 Several States are using the mechanisms set up for corporate governance to spell out and implement their expectations that State-owned enterprises respect human rights (see section III below). 42. The OECD Guidelines on Corporate Governance of State-Owned Enterprises also help to clarify the role and responsibilities of the State as owner. Active ownership is at the core of these guidelines. The guidelines constitute the “internationally agreed standard for how governments should exercise the State ownership function to avoid the pitfalls of both passive ownership and excessive State intervention” (p. 3). States are expected to act as “an informed and active owner, ensuring that the governance of SOEs is carried out in a transparent and accountable manner, with a high degree of professionalism and effectiveness” (chap. II). 43. Such aims are fully compatible with and necessary for the respect of human rights. 27 There is thus no tension between respecting the autonomy of the enterprise’s management, on the one hand, and ensuring that State-owned enterprises respect human rights and responsible business conduct standards, on the other. In the same vein, the Working Group notes that setting up regulations to ensure that State-owned enterprises observe responsible business conduct and respect human rights is no obstacle to their achievement of economic targets. Better business conduct, including respect for human rights, leads to sustainable value creation,28 while the contrary leads to reputational and material risks and costs. 29 44. Therefore, the Working Group encourages States to build on the corporate governance framework to ensure their enterprises respect human rights. This does not mean that a State cannot choose other mechanisms and tools to do so. However, given the conceptual and practical proximity between the Guiding Principles on Business and Human Rights and the Guidelines for Multinational Enterprises, on the one hand, and the Guidelines on Corporate Governance of State-Owned Enterprises and the Principles of 26 27 28 29 See OECD, G20/OECD Principles of Corporate Governance, p. 9. See report of Human Rights Council Advisory Committee on the issue of the negative impact of corruption on the enjoyment of human rights, A/HRC/2/8/73. OECD Policy Framework for Investment 2015 Edition (Paris,2015), chap. 7; and John Evans and Dinusha Peiris, “The relationship between environmental social governance factors and stock returns”, Australian School of Business Research Paper No. 2010ACTL02. See for example, Rachel Davis, Daniel Franks, “The costs of conflict with local communities in the extractive industry”, paper presented at the First Seminar on Social Responsibility in Mining, (Santiago, 19-20 October 2011); and Goldman Sachs Global Investment Research, “Top 190 projects to change the world” (April 2008), cited in A/HRC/14/27. 11