Corporate Governance

Definition:

Corporate governance refers to a set of rules, regulations, and procedures that ensure the optimal protection and balance of interests among all stakeholders in a company, including:

  • Company directors.
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  • Other stakeholders (such as employees, creditors, customers, and the community).

Corporate governance rules are primarily applied to:

  • Publicly traded companies.
  • Financial institutions established as joint-stock companies.

Corporate governance rules have been implemented for all insurance companies under Ministerial Decree No. 45/1999 amending some provisions of the Executive Regulations of Law No. 10/1981 which added rules governing the operation of insurance companies, including internal control committees.

  • Principles of Corporate Governance:

The international principles of corporate governance are divided into six main categories. Each containing a set of detailed principles, namely:

  1. Existence of an effective corporate governance framework.
  2. Rights of shareholders.
  3. Fair treatment of shareholders.
  4. Role of stakeholders in corporate governance.
  5. Disclosure and transparency.
  6. Responsibilities of the Board of Directors.
  • Corporate Governance Principles for Private Pension Funds:

A guide to governance of private pension funds is attached to FRA BoD Decree No. 101/2015. For more details, click here:

 

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