Revised code for all listed companies

Wednesday, July 02, 2008

On 7th May 2008 the Swedish Corporate Governance Board presented a revised Code of Corporate Governance, which will apply from 1st July this year. The most important difference in relation to the existing code is that the new one applies to all companies listed on OMX Nordic Exchange and NGM Equity. Prior to the amendment the Code applied only to companies with a market capitalisation of more than SEK 3 billion.

Like the existing Code, the new one is regulated by the self-regulating Swedish Corporate Governance Board. A further role of the Board is to administer the Code and keep it up to date. Via their registration agreements OMX Nordic Exchange and NGM Equity ensure that companies comply with the rules.

It is now also incumbent on stock market operators to define the issue of the independence of board members, which is no longer regulated by the Code.

Companies that were not previously covered by the Code shall introduce it as soon as possible after 1st July 2008 and in any case no later than in connection with the first AGM to be held after 1st January 2009. All companies are also required to attach a corporate governance report to their annual reports for 2008. However, this does not need to explain cases of non-compliance that are due to the new rules that apply from 1st July 2008 not having been applied during the first half of 2008.

The new Code is generally more concise than the old one. Several rules have been removed as they have been considered superfluous, unnecessarily detailed or now subject to statutory regulation. The provision of corporate governance information on the internet has somewhat greater importance than before.

Those interested in finding out more about the new Code, or how the new Code differs from the old one, can read more on the Swedish Corporate Governance Board’s website.

H&H is ready to help those companies that now need to produce their first corporate governance report, or any company that would like to have assistance ensuring that its existing corporate governance report and website comply with the new Code.