BUSINESS COMBINED WITH RESEARCH

Open Consultation Processes

Business and research collaborate on the process-oriented development of the Corporate Governance Code for SME.

Announcements

Professional topic specific groups manage the development of the Corporate Governance Code and update it annually.

Internationalization

Cross-border research and best practices provide a richer perspective and unites monitoring committees in Europe.

The Purpose of the Corporate Governance Code
The purpose of the Corporate Governance Code (CGC) for small and medium-sized enterprises (SME) is for all businesses to have a clearly defined best practice to strive for in business and socially critical areas based on experience and updated research. The CGC warns of frequently neglected areas.
 
Good board work will strengthen trust in the companies and contribute to the greatest possible value creation over time, for the benefit of owners, employees, society and other stakeholders.
 
To strengthen sustainable international competition, Norwegian companies, as well as those in other countries, must be constantly challenged to take responsibility.
 
Target Group
The CGC is primarily aimed at the boards of small and medium-sized enterprises, which should report on their practices in addition to ordinary legislation. The CGC can be considered by all companies as a benchmark to aspire to.
 
Corporate Governance Across National Borders
The governance model for different countries varies. The general principles can be summarized as follows: The general meeting is the company's supreme body. The company's management consists of the board of directors, the CEO and any other support bodies.
 
The board has both management and supervisory duties. The management task entails that the board of directors manage the company in general, unless otherwise provided by the authority of the other corporate bodies. If necessary, the board may take the initiative to the owners for further clarification of ownership strategy preferences or other owner requirements or expectations. The Board of Directors establish strategy, action plans, budgets and guidelines for the business. Supervisory responsibility means that the Board of Directors supervise the CEO and the company's operations in general, including the company's risk management and sustainable operations. Senior executives are not normally members of the Board of Directors.
 
The CEO is responsible for the day-to-day management of the company, including preparing renewals, and following up on the board's decisions.
 
Compliance With the Corporate Governance Code
The board of directors reports on its application and practice of the CGC on the basis of a "comply or explain" principle. The report should include each individual recommendation and information on the areas where the recommendation is being followed. In the event of deviations, the board provides a justification for these and explains how they have been addressed instead.
 
An overall presentation will make it easy for all stakeholders to determine how the company has organized its corporate governance. However, the overall presentation may provide references to more detailed information elsewhere in the annual report or on the company's website.
 
The CGC is updated every year (February) and is primarily aimed at the companies' boards, which should consider it and decide how the company should follow up each individual point. The board should provide an overall account of the company's corporate governance.
 
Structure of the Corporate Governance Code
The CGC is presented briefly for each area. It is this code of conduct that the companies either follow or explain deviations from.
 
The comments elaborate on, explain and justify the recommendations made. The sources are updated references that help to explain technical terms, relevant terminology and current issues. The board can at all times rely on and study the references as a source of information on the latest movements and developments in business-critical areas.

The wording in the CGC is "shall" because CORPRT intends to be normative. "Should" and "ought to" are used when it is recognized that these practices may be challenging to achieve in all cases.

Keep me posted