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Corporate Governance in Latvia

image of Corporate Governance in Latvia

The Review of Corporate Governance in Latvia was prepared as part of the process of Latvia’s accession to OECD Membership. The report describes the corporate governance setting for both listed companies and the state-owned sector (SOEs). The Review then examines the legal and regulatory framework and company practices to assess the degree to which the recommendations of the G20/OECD Principles of Corporate Governance and the OECD Guidelines on Corporate Governance of State-Owned Enterprises have been implemented. The report finds that Latvia's framework for the corporate governance of listed companies is largely consistent with the Principles. However, the report recommends a series of measures to further strengthen the corporate governance framework, which could help to deepen its currently small capital market and attract investment. For SOEs, the report recognises considerable reforms undertaken during the accession review process to establish an ownership co-ordination unit and to begin re-establishing boards of directors (which had been abolished in 2009). The report calls for consolidation of these reforms and also stresses the importance of clarifying SOE objectives and strategies, and enhancing disclosure.

English

Foreword

Since regaining its independence in 1991, Latvia has made great strides, becoming one of the fastest-growing economies in Europe in recent years. Over this same period, Latvia’s government has taken significant steps to improve the framework for the corporate governance of listed and state-owned enterprises (SOEs). Continuing to improve this framework is an important part of ensuring Latvia remains on a path of sustainable economic development. This review includes key recommendations in this regard that, if implemented, could support a deepening of Latvia’s capital markets and increase the transparency and efficiency of its economically and politically important SOE sector.

English

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