Corporate governance reports drawn up by publicly traded companies are on the same level as those of the previous years
According to the Financial Supervision Authority, the corporate governance reports drawn up by publicly traded companies for 2009 do not differ considerably from the reports of the previous years, i.e. they are satisfactory.
Corporate governance is a code that is meant to be complied with by publicly traded companies and that contributes to better and more transparent organisation of the management of business companies listed on the stock exchange. The Corporate Governance Code is followed on the “comply or explain” principle. This means that it is not obligatory for an issuer to abide by the principles described in the Code; however, non-compliance must be explained. While earlier the obligation of listed issuers to comply with the corporate governance principles had been required by the NASDAQ OMX rules and regulations for the Tallinn Stock Exchange, since 1 July 2009, it has been the Accounting Act that has required companies to draw up corporate governance reports. The Act also requires the companies to set up an auditing committee.
“In our overview this year we provided the issuers listed on the Tallinn Stock Exchange with specific recommendations for drawing up the reports and made general suggestions on how to organise the work of the audit committees. We wish to help and guide publicly traded companies in correct application of the Code,” said Kilvar Kessler, a member of the Management Board of the Financial Supervision Authority. The Financial Supervision Authority believes that the overview of the corporate governance reports will help the issuers and the market as a whole move towards greater and more substantial transparency and enable parties interested to assess the compliance with the Corporate Governance Code and other developments regarding the management of listed public limited companies.
The Corporate Governance Code has been in force since 2006 and the companies listed on the NASDAQ OMX Tallinn Stock Exchange must follow it. The aim of the Code is to make the Estonian securities market more transparent and the management of publicly traded companies more understandable for the investors. The Financial Supervision Authority checks that the listed issuers draw up yearly reports on the compliance with the Code and clearly reacts to any submissions of false circumstances in the reports. The overview complied by the Authority of the corporate governance reports submitted in 2009 (and also in 2006–2008) is available on the website of the Authority. The overview was compiled by Krista Parve, assisted by Jaanika Ots, Kristjan-Erik Suurväli and Kilvar Kessler.