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Corporate Governance in Lithuania

image of Corporate Governance in Lithuania

This review of Corporate Governance in Lithuania was prepared in the context of Lithuania’s accession process to the OECD. It assesses Lithuania’s corporate governance arrangements – the laws, regulations and institutions that shape company oversight – for listed companies and state-owned enterprises (SOEs) against the standards of the G20/OECD Principles of Corporate Governance and the OECD Guidelines on Corporate Governance of State-Owned Enterprises. The report reaches a positive overall assessment of Lithuania’s willingness and ability to implement these corporate governance standards and makes a number of recommendations to address remaining weaknesses. With respect to listed companies, the report notably recommends that Lithuania give priority to monitoring implementation of recent legislative reforms to strengthen corporate boards of directors and, in the medium term, consider further strengthening and clarifying their legal responsibilities. With respect to SOEs, this report recommends that Lithuania give priority to further strengthening the effectiveness of the state’s ownership coordination function, ensuring that the state’s requirements on board composition and disclosure practices are fully implemented by the SOEs for which they are mandatory and moving forward with plans to convert commercially-oriented statutory SOEs to limited liability companies.

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Foreword

This report on Corporate Governance in Lithuania was prepared in the context of Lithuania’s accession process to the OECD, which was launched in April 2015 by decision of the OECD Council. On 3 May 2018, the OECD Council decided to invite Lithuania to accede to the OECD Convention and thereby become a Member of the Organisation, upon formal deposit of its instrument of accession to the OECD Convention, which was pending at the time of publication. As part of its OECD accession process, Lithuania underwent an assessment against the OECD’s corporate governance standards for listed companies and state-owned enterprises (SOEs), namely the G20/OECD Corporate Governance Principles and the OECD Guidelines on Corporate Governance of State-Owned Enterprises. The assessment was undertaken by the two OECD bodies responsible for developing these standards, the Corporate Governance Committee and its Working Party on State Ownership and Privatisation Practices

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