Developing and Implementing Corporate Governance Codes of Best Practice in Eurasia: Rationale and Process

Lessons Learned from Bulgaria

Clarifying the Objectives

Lessons Learned from Bulgaria

Clarifying the Objectives

Prof. Bistra Boeva, Co-Chair of the Bulgarian Corporate Governance Code of Best Practice Task Force

What elements should be included in the terms of reference?

Determining the goal, objectives purpose and role of a code

Key issues Enforcement The Toolkit and the Bulgarian

experience

What elements should be included in the terms of reference? Terms of reference the purpose of the code the objectives scope of the code areas to be covered by the code nature of the code (compliance,

enforcement, implementation First meeting: Sept. 29 2006

The goal of this Code is to contribute through good corporate governance to the strengthening of the competiveness of Bulgarian companies and to make the country more attractive to foreign investors

BNCCG -Introduction

Other goals Help improve CG practices of Bulgarian

companies Raise stakeholders awareness of the

importance of CG Attract foreign and domestic investment

and increase trust in the market Help companies comply with EU standards

and EC recommendations in matters of CG Better prepare Bulgarian companies for

international competition within the EU market-3rd meeting/ Nov. 21 2006

Objectives Give the companies CG best practice

format Provide for clear rules of disclosure and

equal access to information Help companies to better understand

the respective roles of the management and boards of companies

Provide practical guidance on how to govern the companies

Key issues – preliminary list or national practice issues Conflicts of interest Related party transactions Payment of dividends Disclosure of key executive pay Shareholder meetings Appointment of directors Enforcement and implementation of the CG codes Respective roles of executive managers and

directors Respective functions of the Chairman and the CEO

Benchmarks and existing codes to be reviewed

OECD principles 2004 EU directives and recommendations Codes of member states( Austria,

Belgium, Czech republic, Denmark Germany, Greece, Italy, Poland, Romania, Slovenia, Spain, UK) and Turkey

to achieve a balance between the established Bulgarian practices and the international corporate governance standards

BNCCG

Type of the companies at which the code is targeted:

public companies companies that are planning to

become public

enforcement comply and explain listed rules of BSE: companies

listed on official market of equity (segment A+ B) have to comply with BNCCG

Lessons learned 1. a correct and detailed setting of goals and

definition of objectives -important prerequisites for the success of the project- BNCCG

2. a consensus of the task force participants, representing the business community, BSE, the Government, NGOs and academia on the setting of goals and the definition of objectives

3. goals and objectives –constant parameters with slight modification during the process of the elaboration of the Code

4. goals and objectives, which were determined by the Task Force reflect the level of development of CG in Bulgaria and the needs for improvement.

Lessons learned Follow the GCGF toolkit guidance; Navigate the project through the

turbulent environment; Stick to your country’s achievements

and perspectives; Combine well established rules with

your personal experiences

Thank You for your cooperation!

Prof. Bistra Boeva