Corporate governance

CORPORATE GOVERNANCE CODE

Reference codes:

Standards of corporate governance are defined by different reference codes with respect to the type of company. Companies that are obliged to audit have to prepare a CG statement and code compliance within the scope of its annual report they can select a reference code that is relevant to them:

Slovenian Corporate Governance Code for Listed Companies, 2022 - for companies with securities listed on the stock exchange (“listed companies”)
Corporate Governance Code for State-Owned Enterprises, 2019 - for state-owned companies that are managed by SDH d.d. (“state-owned companies”)
The Corporate Governance Code for Unlisted Companies, 2016 - for companies which are subject to auditing and do not fall within the domain of "listed companies" ("unlisted companies")

NEW!
Article 70 of the Companies Act (Official Gazette of the Republic of Slovenia, No. 55/2015): “…Companies that are subject to auditing shall include in the business report a CG statement and statement of Code compliance….”

In paragraph 5, the wording “that has its securities traded on the regulated market” was substituted with the wording “that are subject to auditing”.

Disclosures of deviations from the Code and "comply or explain principle"
Companies that choose to complyone of the reference codes have to disclose their deviations from the code. The purpose of disclosure is to present the specifics of company’s corporate governance to investors and other stakeholders. In doing so, it is vital that the company assesses on its own which code practice will follow. Deviations from the recommendations in the reference code are to be explained in a manner presenting the reasons for having assessed a recommendation as inappropriate for the company and presenting an alternative solution that is more appropriate with respect to the company’s special features. This way, a company provides the transparency of the corporate governance model for the company and enables shareholders, investors and other stakeholders to assess the quality of governance at that company. The purpose of the statement on compliance, therefore, is not to “blindly” follow all provisions of the code, as the recommendation in the code fails to present the best solution for all companies.

Monitoring Reports of CG compiances on Slovenia:

*Report on compliance with the CG code for listed companies in Slovenia for the 2015: Poročilo o analizi skladnosti s Kodeksom upravljanja javnih delniških družb v Sloveniji v letu 2015, 2016
*Practical guidance for quality explanations in CG statements on compliance: Praktični napotki za kakovostna pojasnila v izjavah o upravljanju, 2016
*Analysis of compliance with the CG code for listed companies in Slovenia 2011-2014: Analiza skladnosti s Kodeksom upravljanja javnih delniških družb v Sloveniji za obdobje 2011-2014, 2015
*Analysis of disclosures of deviations in statements: Analiza razkritij odstopanj v izjavah o skladnosti s Kodeksom, 2012

*only in Slovene language

Other resources:

Guidelines on non-financial reporting, 2017
G20/OECD Principles of Corporate Governance, 2015
A Guide to Corporate Governance Practices of the European Union, IFC and ecoDa, 2015
GREEN PAPER - The EU corporate governance framework, 2011

Research and studies:

Comparative study: corporate governance codes in 10 European countries, 2016
Corporate Governance Compliance and Monitoring Systems across the EU, 2015, ecoDa and Mazars

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ONE-TIER CORPORATE GOVERNANCE

A one-tier corporate governance system was formally introduced in the Slovenian legal system in 2006. That is a governance system for a joint stock company with a board and executive directors, while the two-tier corporate governance system is carried out through the supervisory and management board. As of 2006, shareholders may hence choose between a one-tier and two-tier governance system, laying it down in the company’s Articles of Association. Although many codes and gudideliness refer to their sensible use for the work of unitary boards in two-tier system, as is applicable to supervisory boards, SDA developed best practice recommendations for them. This seemed particularly sensible due to a completely new governance system that had not been present in Slovenia before, which is why companies had lacked the experience.

Best practice recommendations:

Research and studies:

Report - Directors' Note One-Tier versus Two-Tier Board System, 2014

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BANK GOVERNANCE

Due to the specific position and importance of banks for the national economy, they are subject to a series of other regulations and guidelines of best practices as accepted by national or European regulators or relevant CG codes' custodians.

Legislation:

Zakon o bančništvu – ZBan-2, Ur.l.RS, št. 25/15.

Sklep o spremembah in dopolnitvah Sklepa o skrbnosti članov uprave in nadzornega sveta bank in hranilnic, Ur.l. RS, št. 74/13
Sklep o skrbnosti članov uprave in nadzornega sveta bank in hranilnic, UR.l.RS, št. 62/11

Best practice recommendations:

Research and studies:

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GOVERNANCE IN COMPANIES WITH CAPITAL ASSETS OF THE STATE

Slovenia still has a large share of companies with capital assets of the State and their governance is regulated by different acts and guidelines of the Slovenian Sovereign Holding

Best practice recommendations:

Recimmended reading:

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