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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.

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Latvia and the core Corporate Governance Principles: The Roadmap for Accession

In 2014, Latvia was reviewed against the recommendations of the Principles of Corporate Governance and Guidelines on Corporate Governance of State-Owned Enterprises. This chapter, along with Chapter V, builds on these reviews, following the structure of the Corporate Governance Committee’s “Concept Paper”, which sets out five “core” corporate governance accession principles: (1) shareholder rights and equitable treatment, including treatment of the market for corporate control; (2) related party transactions and conflicts of interest (3) institutional investor disclosure, corporate governance policies, conflicts of interest and voting; (4) insider trading and abusive selfdealing; and (5) equitable treatment of shareholders among state-owned enterprises.

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