The Development of a Code of Corporate Governance for Armenia

Corporate Governance, GBRW Consulting, GBRW Group

GBRW was contracted by the EBRD to develop a Code of Corporate Governance for the government of Armenia.

The proposals were based on the OECD Principals of Corporate Governance and the Basel Committee for Banking Supervision and adjusted where necessary to conform to existing local law and regulation.

In conjunction with the Ministry of Economy a working group and various sub-committees were established. The central bank had established its own strong corporate governance code, which wasn’t followed to any great extent by banks, and there was an overall lack of awareness nor indeed any form of practical enforcement, except possibly by the Stock Exchange on companies seeking additional funding and a credit rating.

GBRW delivered a detailed Concept Paper that set out the requirements to meet Corporate Governance international standards of best practice. This was submitted to the various sub-committees and difficulty was experienced in reaching a consensus for drafting a code that was lower than international standards in various aspects but met local law, regulation and culture.

A consensus was reached and final recommendations and proposals submitted to the Ministry of Economy but the contract had to be time extended to accommodate the delays arising from the issues raised by the sub-committees.

Deliverables included:

- Review of all existing legislation, regulation, and practice;

- Development of a detailed Corporate Governance Concept Paper;

- Discussion and review of the concepts with sub-committees representing government and practitioners;

- Consensus reached on amendment of the Corporate Governance Concept Paper; and

- Delivery of the final report to the government and the EBRD proposing recommended changes and development of the Corporate Governance Code in Armenia.