Corporate Governance Recommendations approved

22.09.2005 TLN

Financial Supervision Authority and Tallinn Stock Exchange press release
22.09.2005

The Financial Supervision Authority has accepted the recommendable guideline “Corporate Governance Recommendations ”. The proposed guidelines are intended, first and foremost, for the listed companies, and are also enforced by the regulations of the Tallinn Stock Exchange. The guidelines will take effect on January 1, 2006.

The Corporate Governance Recommendations provides procedural instructions for companies and helps to resolve conflicts of interest and prevent special interest groups from exerting too great influence on the management of the company. It must be clear to investors, which regulations that take into account the interests of shareholders are followed in the management of the company, and which are not.

Even though the Corporate Governance Recommendations are intended, above all, to make the management of listed companies more transparent, it is suggested that all financial institutions that are under the supervision of the Financial Supervision Authority abide by them. All other companies in Estonia can follow these guidelines as well, because effective risk management and internal control systems, as well as transparent management, are critical not only to financial institutions, but to all companies which want to be successful and sustainable.

“Listed companies are expected to follow the highest standards on the market. These are companies which are respected, and are imitated and valued. Estonian companies answer to the standards required of listed companies, often even before being listed. Therefore, the guidelines are received from life itself. The Corporate Governance Recommendations should be an example and goal for all companies that wish to improve their management,” said Chairman of the Management Board of the Tallinn Stock Exchange Kaidi Oone.

“It is a very positive thing that the Corporate Governance Recommendations have finally been written down. Hopefully, it will be received positively, especially in situations in society where there is active discussion of questions regarding (business)ethics. We see the Corporate Governance Recommendations in the long-term perspective, as a guideline which is actively followed and reflects the best practices of the Estonian market,” said Andres Trink, chairman of the management board of the Financial Supervision Authority.

“In addition to companies, the Corporate Governance Recommendations are aimed at investors, because investors have to participate actively and responsibly in the management of companies. In addition to rights, shareholders also have obligations when it comes to the business. The Corporate Governance Recommendations give the companies a set of regulations, which help to direct how the shareholders manage the company and how they complete their obligations in the eyes of the company,” added Oone.

Following the Corporate Governance Recommendations increases trust in our companies and supports the development of investment culture. Following the Corporate Governance Recommendations should also create a well-informed measure of control and it should be the objective for all companies, including the strategic businesses owned by the government,” added Trink.

The Corporate Governance Recommendations was developed by a roundtable of experts – stock exchange issuers, investors, auditors, entrepreneurs, public sector representatives, lawyers and others. The work of the roundtable was coordinated by the Financial Supervision Authority and the Tallinn Stock Exchange.

The Corporate Governance Recommendations is available as a Financial Supervision Authority recommendable guideline and as a commented publication issued in cooperation with the management magazine Director. The materials are also posted on the Financial Supervision Authority’s website: www.fi.ee, as well as the Tallinn Stock Exchange’s website: www.ee.omxgroup.com/heatava . Printed copies of the commented publication can be obtained from the Financial Supervision Authority office (Sakala 4, Tallinn) and the Tallinn Stock Exchange office (Tartu mnt 2, Tallinn).

The Financial Supervision Authority is an autonomous financial supervision agency, whose goal is to enhance the stability, reliability, transparency and efficiency of the Estonian financial sector. One of the goals of the financial supervision is to protect the interests of clients and investors by safeguarding their financial resources.

Tallinn Stock Exchange is the only regulated securities market in Estonia. Tallinn Stock Exchange is part of OMX Exchanges, which owns and operates exchanges in Copenhagen, Stockholm, Helsinki, Riga, Tallinn and Vilnius. Through OMX Exchanges, OMX offers access to approximately 80 percent of the Nordic and Baltic Securities market.