New Corporate Governance Code For Listed Companies Was Approved By The Vilnius Stock Exchange

The Vilnius Stock Exchange (VSE) Management Board approved the Code of Corporate Governance for the companies listed on the VSE. Starting from 2007, the annual reports of the listed companies shall contain a notification how they comply with the recommendations of the Code. If the company does not comply with the Code it shall specify which recommendations are not complied with and for what reasons.

“The principles of this Corporate Governance Code are based on the best governance practice analysis as well as the lately introduced recommendations of the European Commission regarding the enhancement of the corporate governance in the EU. It must be noticed, that good corporate governance is a key factor to attract both domestic and foreign investment, retaining investor confidence in the company and increasing the company’s competitiveness. Therefore one of the objectives of the Code is to encourage the listed companies to improve their governance and disclosure of information on their activities. This should heighten the investors’ trust in the Lithuanian securities market”, - said Dalia Jasulaityte, Chairman of the VSE Management Board.

The principles of the Code are related to the protection of the interests of shareholders, the adequate balance and distribution of functions between company’s management and supervisory bodies, the adequate disclosure of the material information.

Although according to the Law on Securities Market, the Code is primarily applicable to those companies, which securities are listed on the VSE, other companies are also called to follow the recommendations of the Code.

While drafting this new Code specific consideration was given to the opinions of the listed companies, the Lithuanian Securities Commission, the Ministry of Economy, the Ministry of Finance, the market participants and the legal advisors. The most recent recommendations of the European Commission are also included in this Code.

According to the European Commission, about 40 corporate governance codes have been adopted in Europe during the last 10 years. Usually corporate governance codes are drafted by stock exchanges and are applicable to the companies listed on those exchanges.