The Bucharest Stock Exchange’s new Code of Corporate Governance was recently presented at a conference organized jointly by BVB and the European Bank for Reconstruction and Development (EBRD) in Bucharest on Wednesday, February 5. 

At the conference, representatives of the two institutions, alongside stakeholders of the capital market in Romania and abroad, outlined the importance of corporate governance and sustainable development of the Romanian capital market. “The code will strengthen market dynamics, create the foundation for sustainable growth and ensure engagement of companies with their investors to maximize the transformative potential of corporate governance reforms,” stated Victoria Zinchuk, EBRD Director for Romania.

Adrian Tănase, BVB CEO, added that the Code will contribute to Romania’s accession to the Organisation for Economic Co-operation and Development (OECD). “Good governance illustrates, among others, the harmonisation of stakeholders’ interests with the company’s interests. Any investor, when deciding to invest in a company, will do so because they see the story of growth behind that business, as well as the corporate governance applied by the company,” he added.

With the help of public and private sector partners, BVB initiated the revision of the Code of Corporate Governance in May 2024 in order to bring it in line with the recent regulatory changes. The main purpose of the code is to support issuers’ corporate resilience in a rapidly changing world, to increase market resilience and access to capital and to foster innovation and sustainable practices. 

“The additions to the Code of Corporate Governance made by the relevant experts, with EBRD’s support throughout this process, feature the natural development, the harmonization of the code provisions with the recent regulatory amendments, with the best practices in the industry, with the latest Corporate Governance Principles of the Organisation for Economic Co-operation and Development (OECD) and with market participants’ priorities," stated Radu Hanga, President of the BVB Board.

The Code follows the “comply or explain” approach, which provides companies with the flexibility to decide which practices to adopt in order to ensure the effectiveness of their governance. When a company does not comply with a Provision of the Code, it should provide an explanation why it has not done so. 

The changes to the new code include, among others: 

• making a distinction between the companies managed under the unitary system and those managed under the dual system; 
• annual monitoring by BVB of the issuers’ compliance with the code provisions; 
• adding the section dedicated to Sustainability in order to prepare issuers for a smoother adoption of the sustainability legislation; 
• the need for the Board of Governors (BG) to develop a profile of the Board in order to guide the recruitment and succession process; 
• the need to implement a diversity policy for the BG and the executive management; 
• making a clear distinction between the BG Chairman’s roles and those of the General Manager; 
• electing the general secretary of the BG among the senior experts of the company; 
• the BG’s annual evaluation; 
• developing a whistleblowing mechanism by BG, which is freely available on the company’s website; 
• remunerating BG’s members as per the Company Remuneration Policy; 
• recommending an Investor Relations Officer (IR) to report directly to the general manager or to the financial manager; 
• recommending a Risk Management Officer; 
• adding additional independence criteria for BG members and members of the audit committee

The Code is applicable to all companies listed on the BVB main market. The first year of reporting for compliance with the new code is 2026, for the financial year 2025. BVB will annually monitor the issuers’ compliance with the code and publish an aggregate monitoring report. 

radu@romania-insider.com

(Photo source: BVB press release)