Corporate governance

Abstract

>> The first Guidelines on Corporate Governance were published in 2004. One year later the second edition, and the third in 2009.

>> The publishers of the Guidelines are The Iceland Chamber of Commerce, Confederation of Icelandic Employers and NASDAQ OMX Iceland. They have traditionally enjoyed broad support of a number of people, companies and organizations, and most recently the Financial Supervisory Authority which joined the group as an observer.

>> The main objective is to improve corporate governance by clarifying roles and responsibilities of managers and enable them to fulfill their work and uphold the interest of all stakeholders.

>> The Guidelines are intended to show the will of the Icelandic business community to shoulder its responsibilities and its initiative to adopt guidelines in order to strengthen the infrastructure of companies and enhance overall confidence towards business.

>> The Guidelines are not a substitute for legislation, but are intended to clarify legislation on the work of managers and they implement additional obligations beyond laws and regulations.

>> Basis of the Guidelines is the “follow or explain” rule that provide company managers leeway to deviate from specific details of the Guidelines if they explain and clarify the reasons for it and what measures were taken instead.

>> The Guidelines are specifically targeted at companies that qualify as publicinterest entities, but these are companies that have their shares traded on a regulated market, pension funds, financial institutions and insurance companies.

>> The Guidelines can, however, benefit all companies, regardless of their size and activities.

>> According to recent legislation, Financial Undertakings and companies that have their shares traded on a regulated market must follow guidelines on corporate governance.

>> In preparing the new Guidelines a special emphasis was put on consistency with other Nordic guidelines in this area.

>> Companies can now to undertake an independent audit of governance through an evaluation process based on these guidelines. It is also intended to provide other stakeholders, such as investors and creditors, tools for evaluating companies and their executives.

>> If there is any discrepancy between this translation and the original version in Icelandic, the latter prevails.

>> This version of the guidelines takes effect from the financial year 2012.