CORPORATE GOVERNANCE CODE REVISED

2022-03-30 09:10

The Corporate Governance Code has been revised, and approved in the FRC’s regular meeting of 23 March 2022. The Corporate Governance Code was adopted originally by the FRC in 2007, and amended later in 2014. In the revision made in 2022, the structure and operating principles of the Board of Directors have been improved; based on international best practices and sensitive to the features of Mongolia.

In particular, the Boards of Directors are now in charge of implementation and monitoring of the Code. The scope of the Code has been expanded, for its enforcement not only in public listed companies, but also insurers, NBFIs (trust service providers) and investment management companies. Companies are obliged to introduce remote technologies for improving conditions that allow the Board of Directors to function in their role as independent members, reporting violations, compliance monitoring, and organizing shareholders' meetings. Furthermore, recommendations to ensure the independence of the Board Chair and the majority of members, and to pay critical attention to the rights of foreign and small shareholders, are all reflected in the Code. The Model Program for Implementing Corporate Governance Code has been included as an appendix. Boards of Directors are required to present a performance report at least once a year, reflect the results in their annual report, and share it on their websites.

If a company’s implementation of the Code is assessed as insufficient, the listing of the securities will be downgraded, and investors will be able to make decisions by evaluating corporate governance along with financial figures.

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