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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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Introduction to the corporate governance review of Lithuania

The review of Corporate Governance in Lithuania was prepared in the context of Lithuania’s accession process to the OECD, to assess the corporate governance arrangements for listed and state-owned enterprises in Lithuania against the G20/OECD Principles of Corporate Governance and the OECD Guidelines on Corporate Governance of State-Owned Enterprises. This introductory chapter provides an overview of the process and methodology of the review, including reference to the “core” corporate governance principles used to inform the assessment. The chapter also summarises measures taken by Lithuania throughout the accession review process to implement OECD recommendations and further align Lithuanian practices with OECD corporate governance standards.

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