ARTICLE
5 January 2023

Corporate Governance Code: How Will Your Company Apply The Code To Ensure A Sound Governance Structure?

FM
Finance Malta

Contributor

Finance Malta is a non-profit public-private initiative set up to promote Malta as an international financial centre, both within, as well as outside Malta. It brings together, and harnesses, the resources of the industry and government, to ensure Malta maintains a modern and effective legal, regulatory, and fiscal framework in which the financial services sector can continue to grow and prosper. The Board of Governors, together with the founding associations: The Malta Funds Asset Servicing Association, the Malta Bankers Association, the Malta Insurance Association, the Association of Insurance Brokers, the Malta Insurance Managers Association, the Institute of Financial Services Practitioners; its members and staff are all committed to promote Malta as an innovative international.
Given the wide range of entities falling within the scope of the Code, entities are expected to adhere to the Code in a manner that is proportionate to their nature, size and complexity.
Malta Corporate/Commercial Law
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On 5 August 2022, the Malta Financial Services Authority (the 'MFSA') introduced its Corporate Governance Code (the 'Code') which applies to all authorised entities falling within the remit of the MFSA's supervisory powers. The Code seeks to enhance governance structures by guiding board members and practitioners to implement or bolster, on a best-effort basis, governance practices in the best interest of all stakeholders concerned. The Code inter alia emphasises the importance of:

  1. an effective board which is composed of executive and non-executive independent directors, to periodically conduct board self-assessments and evaluations to ensure board effectiveness;
  2. internal controls, in order to ensure that boards exercise adequate oversight of executive management and that boards have an adequate understanding of risk;
  3. stakeholder engagement; and
  4. corporate culture, and corporate social responsibility.

Given the wide range of entities falling within the scope of the Code, entities are expected to adhere to the Code in a manner that is proportionate to their nature, size and complexity.

Originally Published by 14 October 2022

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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