Extract from the financial statements of Megablast Ltd regarding corporate governance:

`Mr Tidyman is the Chief Executive officer and board chairman of Megablast, he appoints and maintains a board of six executives and two non-executive directors, one of which is his father, the former chairman of Megablast, Sir Roger Tidyman.

The board sets performance targets for the senior manager in the company but there are no formal targets for directors and the company does not have a remuneration committee. Mr Tidyman carries out a review of board policies annually in conjunction with the non-executive directors. Salaries for executive directors are set and paid by Mr Tidyman based on his assessment of all the board members, including himself. There is no formal measure of the actual performance of individual directors.

Internal controls in the company are monitored by the senior accountant, although a detailed review is assumed to be carried out by the external auditors; Megablast does not have an internal audit department.

Annual financial statements are produced, providing detailed information on past performance.

Required

Explain why Megablast does not meet international codes of corporate governance.

Identify the corporate governance principles issued by OECD.

Explain the argument for and against the application of OECD corporate governance principles