Georgia approves “Code of Corporate Governance for Issuers of Government Securities”

The National Bank of Georgia, with the active cooperation and participation of the World Bank and the International Finance Corporation (IFC), has approved a “Code of Corporate Governance for Issuers of Government Securities”.

The main objective of the Code is to promote increased corporate responsibility, active communication with stakeholders, transparency and the protection of investor rights. This should help companies achieve their long term goals and increase investor confidence in companies. Subsequently, it will play an important role in attracting local and foreign investment.

The basic standards of corporate governance in Georgia are established by various legislative acts. Therefore, companies are already responsible for committing to fully comply with these requirements. However, the changes made to the Georgian “Securities Market” law in 2020 with regard to issuers of government securities highlighted the need to develop a corporate governance code that would clearly define the organizational requirements. to which companies had to respond.

The “Code of Corporate Governance for Issuers of Government Securities” reflects the requirements of companies and the reporting process. Based on the “Apply or explain an alternative” approach, the Code requires disclosure of the corporate governance approaches of issuers with regard to the principles set out in the Code, and aims to promote the widespread application of best corporate governance practices. ‘business.

The Code is based on international best practices. It incorporates the standards of various countries, international organizations and the European Union, including the corporate governance principles of the Organization for Economic Co-operation and Development (OECD), as well as the recommendations of the European Commission 2014 and 2015.

The Corporate Governance Code will enter into force on January 1, 2022. Companies will be required to submit the report defined by the Code for the reference year 2023.

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