ZSE, SKDD and Hanfa organise annual training event for issuers

The annual traditional education event for issuers, co-organised by the Croatian Financial Services Supervisory Agency (Hanfa), the Central Depository and Clearing Company (CDCC) and the Zagreb Stock Exchange (ZSE), gathered, as in previous years, around 100 representatives of companies listed on the Zagreb Stock Exchange. 

Companies’ representatives had the opportunity to learn more about regulatory innovations in the area of sustainability reporting and about how they will affect issuers in Croatia. On that occasion, representatives of the Ministry of Finance (Ivana Ravlić Ivanović and Amalija Jurin) presented the proposal of the Act on Amendments to the Audit Act and the proposal of the new Accounting Act.

New corporate governance principles in national regulations

Andreja Hašček, Head of the Hanfa Issuer Supervision Department, spoke about the upgrade of the principles of corporate governance and the importance of this area for Croatia's entry into the Organisation for Economic Co-operation and Development (OECD). Having highlighted this important strategic foreign policy goal, which is supposed to round off the international position of the Republic of Croatia, she emphasised the significance of the area of assessment of the corporate governance system according to the OECD Principles. This chapter, as all the others, should be completed by 2025.

The G20/OECD Principles of Corporate Governance are an international standard and benchmark for corporate governance, which forms the basis for numerous reform initiatives undertaken by the public and private sector. They are divided into key areas such as the rights and equal treatment of shareholders, institutional investors, stock exchanges and other intermediaries, transparency in the disclosure of all material company-related information, accountability of the board, the importance of contributing to the sustainability and resilience of the company, etc. 

As Hašček mentioned in her presentation, the revised Principles promote the enlarged use of digital technologies to enhance supervisory activities, a regulatory framework for effective supervision of companies - members of groups whose securities are listed on the stock exchange, as well as the holding of general shareholder meetings in virtual or hybrid format for the purpose of ensuring equal access to information and remote voting rights. 

Strengthening gender equality

The new Principles also encourage the dissemination of information on management boards and supervisory boards, their independence, gender balance, qualifications, the electoral process as well as participation in other committees. Additional measures are expected to be put in place at national levels to strengthen the position of women in the company, which includes lists of compliant companies and employment policies. Furthermore, the Principles are supposed to ensure the provision of information that will link remuneration to long-term performance, disclosure of the structure of companies within the group and their mutual control, and disclosure of information on the existence of debts and risks in case of non-compliance with covenants. 

Finally, the OECD Principles promote decision-making and risk management in the company with a view to achieving sustainability, transition to sustainable development and transparency of sustainable development information.

Upgrading the Corporate Governance Code

Following these changes, as well as Croatia's accession to the OECD and new EU regulations, Croatia is expected to upgrade the existing legislation, but also to amend the existing Code of Corporate Governance. In addition to the above-mentioned laws, this will certainly lead to amendments to the existing Capital Market Act. 

Issuers were also made familiar with the ESG issuer ranking project, issuers’ role in and influence on the new capital market development strategy and the proposal to establish an issuer association at the Croatian Chamber of Economy. The workshop also included a discussion on transaction accounts and the registering of issuers' general meetings through the CDCC.