Corporate Governance

Increasing the size of organisations inevitably leads to more challenges for their management to apply such system of governance that ensures flawless functioning in all aspects. In addition to the purely operating effect from successful corporate governance, its documentation provides reporting to all interested parties. Most often, these are shareholders and owners, but could also be the wider public, when the entity has operations of public interest.

The practice in developed markets, as well as the specific recommendation of the European Commission from 9 April 2014, suggest it is necessary to improve the quality of declarations for corporate governance, published by companies in compliance with article 20 of the Directive 2013/34/EU and more specifically the quality of explanations, provided by the companies in case of deviation of the recommendations, subject of the corresponding codices for corporate governance.

The National Corporate Governance Committee (NCGC) functions as an independent body, established under the joint efforts of the Bulgarian Stock Exchange and the Financial Supervision Commission. More information about the work this body is available on their web page ( Main part of the operations of NCGC is focused on establishing and maintaining the National Codex for Corporate Governance, which corresponds to the good practices of developed stock markets and is in compliance with the requirements of the European legal framework.

The public companies in the country have already declared compliance in applying the National Codex for Corporate Governance. Regardless of size and specifics of the operations, the codex provides a good basis for all other enterprises, including small and medium-sized, in the process of preparing guidelines for good corporate governance. Our experience shows the documentation and complying with such leads to more effective organisation of the business as a whole. In this respect, we expect the topic to become even more significant for the Bulgarian economic environment.

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