EBRD and Bucharest Stock Exchange to align Romanian market’s corporate governance code to global standards

The European Bank for Reconstruction and Development (EBRD) and the Bucharest Stock Exchange (BVB) will work together to review the Romanian market’s corporate governance code, aligning it with recent regulatory changes and updated global standards. The initiative is designed to help listed companies improve their governance and reporting quality.

The reviewed Code will be aligning with EU regulatory changes affecting governance structures, the latest G20/OECD Corporate Governance Principles, and best practices in the field, according to the EBRD press release.

“Corporate governance is paramount for investors, who rely on robust governance frameworks to assess the integrity and performance of companies, make informed investment decisions, and allocate capital efficiently. By promoting disclosure, oversight, and shareholder rights, effective governance enhances investor confidence, lowers the cost of capital, and reduces agency conflicts,” said Victoria Zinchuk, EBRD Head of Romania.

The revised version of the Code is meant to be released by the end of 2024, so the first year of reporting compliance with the new Code is 2026 for the financial year 2025.

The process of reviewing the Code will take into account the input and insights of all market participants.

“These updates are not about compliance, but also about common sense, about aligning governance practices with evolving regulatory frameworks, industry standards, and societal expectations. By applying the good governance principles, companies can enhance transparency, accountability, and risk management, fostering investor trust and safeguarding long-term sustainability,” said Radu Hanga, Chairman of the BVB Board.

The EBRD and BVB are supported in the project by representatives of renowned institutions from the international governance landscape and from the Romanian private and public sectors: the General Secretariat of the Romanian Government, the Agency for Monitoring and Evaluation of the Performance of Public Enterprises, the Financial Supervisory Authority, the Romanian Investor Relations Association, the promoter of investor relations concept in Romania, and the Envisia Boards of Elite, the business school for board members and C-level executives, actively promoting responsible corporate governance practices.

By the end of 2023, BVB listed 371 companies with capitalization in excess of RON 300 billion (EUR 60.2 billion), the highest level in history. The main market index, BET, closed 2023 with a nearly 32% advance, and the BET-TR index with an advance of nearly 40% compared to the start of 2023.