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The FSA gives Corporate Governance Recommendations reports a “satisfactory” grade

12.10.2008

On 13 October 2008, the FSA published an overview of the Corporate Governance Recommendations (CGR) reports published by the issuers whose securities have been admitted to trading on Tallinn Stock Exchange. The obligation to publish CGR report is stipulated in the Rules of Tallinn Stock Exchange and the first report had to be published regarding the 2006 economic year.

CGR is a body of recommended principles, which have to be applied on „comply or explain" basis. The Issuers disclose in the annual CGR report which principles they have not followed and provide explanations for not following.

The FSA stated that the reports were complied on a satisfactory level; main insufficiencies were that the issuers did not valuate their practices against all principles provided in CGR and that the issuers did not offer sufficient explanations for not following CGR principles. The FSA detected CGR principles causing discrepancies for most of the Issuers:

1) the principle to disclose remuneration paid to each member of the management and supervisory board
2) the principle that at least half of the members of the supervisory board are independent.

The FSA proposes to make the above mentioned principles binding and to regulate these through legislation.

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