The National Bank of Georgia, with the active cooperation and involvement of the World Bank and the International Finance Corporation (IFC), has approved a "Corporate Governance Code for issuers of public securities".

 

The main purpose of the Code is to promote increased responsibility for companies, active communication with stakeholders, transparency and protection of investors' rights. This is expected to help companies to achieve long-term goals, and to 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. Hence, companies are already charged with commitment to fully comply with these requirements. However, amendments made to the Law of Georgia “on the Securities Market” in 2020 in terms of issuers of public securities showcased the necessity to develop a corporate governance code that would clearly outline the organizational requirements that companies had to meet.

 

"The Corporate Governance Code for Issuers of Public Securities" reflects the requirements for companies and the reporting process. Based on the "Apply or Explain an Alternative" approach, The Code requires the disclosure of issuers' corporate governance approaches vis-à-vis the principles set out in the Code, and aims to promote the widespread application of best corporate governance practices.

 

The Code is based on the international best practice. It incorporates the standards of various countries, international organizations and the European Union, including the principles of corporate governance of the Organization for Economic Cooperation and Development (OECD), also, the European Commission 2014 and 2015 recommendations.

 

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 reporting year of 2023.