Date: 10.12.2009
New Corporate Governance Code signed
Ljubljana, 8 December 2009 – The signatories of the Code – the Ljubljana Stock Exchange, the Association of Supervisory Board Members of Slovenia and the Managers' Association of Slovenia – have signed today the new Slovene Corporate Governance Code. The main objective of the recast was to align the Code with legislative changes and developments in the field of best practice of corporate governance over the past two years. The new Code will take effect on 1 January 2010.
The Slovene Corporate Governance Code was last amended on 5 February 2007, and since then company law, EU recommendations and other best practice recommendations with respect to corporate governance have witnessed several changes. The recast Code has aligned its contents as well as terminology with the Slovene legislation, the EU recommendations and other international recommendations (including other CG codes), and has adjusted its guidelines to meet practical needs.
The new CG Code places more emphasis on areas governing the operations of supervisory boards and
transparency of operations, and introduces significant changes to the recommendations regarding the
remuneration of management and supervisory bodies. The CG Code also has a new internal structure as
a document, as it no longer contains the provisions and principles that have in the meantime been
incorporated into the legislation as statutory provisions.
Some of the Code's main novelties are:
A new recommendation for companies to draw up a CG Policy, which defines all of the company's stakeholders and their mutual relations. It is meant as a commitment for future action, not as a means of disclosure of past events. It can therefore function as a clear signal to investors and other stakeholders about the level of CG in the company and about how its bodies operate.
A more active role of the supervisory board in drawing up the CG Policy and in the company's overall CG. The core changes are cooperation of the supervisory and management boards, who should work together in drawing up and adopting the CG Policy as well as presenting it to the other stakeholders. Since it was precisely the supervisory boards that were relatively passive and inefficient in the past, this is an attempt to make them more proactive and more diligent in enforcing their chief tasks (e.g. evaluating the management board, remuneration systems, management board appointment systems, the manner and transparency of proposing a new supervisory board, etc).
Recommendations intended to make supervisory board operations more transparent and efficient, such as the recommendation for an additional criterion of independence for members of the supervisory board, namely independence from substantial shareholders, and a more clearly defined process of training to act as member of the supervisory board, which is crucial for the proper understanding of CG. More emphasis has also been placed on the transparency in proposing candidates for members of the supervisory board.
The updated recommendations regarding the remuneration of management and supervisory bodies include, primarily, the increased role of shareholders in determining the remuneration policy for the management, to enable a more transparent remuneration system. The Code upholds the modern system of management remuneration, which is directly linked to performance and based on actual criteria.
The signatories of the Code – the Ljubljana Stock Exchange, the Slovenian Association of Supervisory Board Members and the Managers' Association – have striven to review the efficiency and adequacy of the Corporate Governance Code on a regular basis, taking into consideration the legal and actual environment of companies, as well as adopt potential changes and supplements to it. We believe the new Code can offer Slovene companies a solid framework for implementing the highest international standards of corporate governance.
The new Slovene Corporate Governance Code will enter into force on 1 January 2010. The amendments and fair copy are available on the websites of all three signatories.
Ljubljana, 8 December 2009
Ljubljana Stock Exchange
Slovenian Association of Supervisory Board Members
Managers' Association