New Corporate Governance Code released

Aug 02, 2021

At the end of 2020, the Corporate Governance Advisory Board completed its work on the development of the Corporate Governance Code (Code). The Code consists of 17 principles that promote the long-term growth of the company's value, its effective governance and transparency. These principles are grouped into 10 sections and cover both conceptual issues of corporate governance, such as corporate strategy, internal culture and ethics, and more detailed issues of board election and composition. The principles contained in the Code summarize international best practices in corporate governance and can be applied to any company that wants to improve operational efficiency and achieve long-term value growth. It is especially important to ensure that the principles contained in the Code are observed by public interest entities (financial institutions, listed companies), public corporations and derivatives corporations, as well as other companies with a broad shareholder base or systemic influence in the Latvian economy.

The new code pays particular attention to the role of the board in developing and implementing corporate strategy, the role of independent board members, the diversity of board composition, internal control and risk management, the company's internal culture and ethical standards, and conflict of interest management.

Daiga Auziņa-Melalksne, Head of the Corporate Governance Advisory Board, points out: "Well-governed companies are more valuable because they are more successful in overcoming crisis, have a better reputation and are top-rated employers."

New series of discussions to promote principles of good corporate governance were introduced this spring by the Finance and Capital Market Commission, the Ministry of Justice and Nasdaq Riga in cooperation with partners who are promoting good corporate governance in Latvia.

The following discussions were organized this year:

  • April 16, 2021 -  “Rights of investors: An endorsed garden or the wild jungle”. To revisit the discussion click HERE
  • May 14, 2021 - "Company council – a driver of development or formality?" 
  • June 11, 2021– “ESG: a fashion case or a necessity”

To view the Corporate Governance Code click HERE

The Corporate Governance Advisory Board has established the Latvian Corporate Governance Award 2021 to promote the practical implementation of the Latvian Corporate Governance Code in Latvian companies, thus promoting corporate efficiency and long-term value growth as well as providing positive assessment of companies and highlighting examples of good practice. The Award ceremony of the Latvian Corporate Governance Award 2021 will take place on September 10, 2021 at Riga Castle. Find out more HERE

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