Chaired by Professor Bistra Boeva of the University for National and World Economic Studies and Bistra Ilkova, CEO of the Bulgarian Stock Exchange, the Task Force’s role was to review international best practices and develop a National Corporate Governance Code for Bulgaria.
The first Bulgarian National Corporate Governance Code will be launched on October 9, 2007 following a broad national and international consultation.
Based on the OECD Principles of Corporate Governance, the Code will serve as a tool to help companies improve their governance practices; provide clearer guidance for financial and non-financial disclosure; foster better protection of minority shareholders; and clarify the respective roles of managers and directors of companies. Such codes already exist in many countries around the world and their adoption is recommended by the EU’s Transparency Directive.
With Bulgaria’s recent accession to the EU, companies need to improve their governance practices to increase their competitiveness within the European market and to inspire both investor and lender confidence. Prof Boeva explains that such “a Corporate Governance Code is much needed for Bulgaria and will support the business community’s efforts to compete on the EU and international markets. It will give companies that want to apply better governance practices the opportunity to distinguish themselves”.
Corporate governance is broadly defined as a system by which companies are directed and controlled. Sound corporate governance practices are known to spur both domestic and foreign investment and constitute an important element of sustainable private sector development.
The Bulgarian Stock Exchange will replace its current Code with the new National Code and require listed companies to comply with the Code or explain why they did not or could not comply with certain provisions. Non-listed companies are encouraged to follow the Code’s core recommendations in accordance with their abilities and ambitions.