Iceland: Guidelines on Corporate Governance - third edition published

The third edition of the Icelandic Guidelines on Corporate Governance was published a couple of months ago by the Iceland Chamber of Commerce, NASDAQ OMX and the Confederation of Icelandic Employers. A copy in English has this week been added to the codes directory maintained by the European Corporate Governance Institute. In the foreword accompanying the Guidelines it is explained:

The main additions and changes involve requirements for the independence of Directors, communications and goal setting, the role of the Chairman of the Board, internal controls and risk management, remuneration policy, as well as focusing on the disclosure of more detailed information. this new edition also discusses the code of ethics and corporate social responsibility, which is known to substantially affect the reputation of corporations and their success in the long term. This type of emphasis would give the Icelandic business sector an opportunity to gain an edge internationally and is in line with goals for sustainable development and the development of resources, something that has long been of great interest to Icelanders.

These Guidelines are suitable for and are particularly directed at undertakings that are considered public-interest entities, whether listed on a stock exchange or not. They are also suitable for other public limited companies and private limited companies and may in whole or in part be useful for other undertakings or institutions given that they contain guidelines on the work and job responsibilities of nearly all managers, regardless of the size and type of undertaking. In addition, the Guidelines apply to companies owned by the state and local authorities. The publication 'Corporate Governance of Publicly Owned Enterprises', issued in November 2008, contains further provisions on special stipulations for such undertakings. Although the goal of the Guidelines is to strengthen and promote firms, strict compliance is not mandatory. Listed firms, however, are required to comply with these Guidelines, as is indicated in the NASDAQ OMX rules for the issuers of financial instruments. As before, the basic requirement is that companies follow the rule of 'comply or explain', which states that if a company does not comply with the Guidelines in all matters, it must then disclose any non compliance and provide the reason for it in the annual accounts or in the annual report".