ensuring you meet with the standards of the law wherever you do

Global ComplianceEnsuring you meet withthe standards of the lawwherever you do business

Sandford Fleming(1827-1915),Engineer andinventor ofstandard time

This publication forms part of Eversheds’ pioneeringset of publications aimed at helping our clients withinternational legal issues in areas such as compliance,contracts and class actions. Designs have been inspiredby great pioneers from the past.

Introduction

Global Compliance is the key issue faced by theGeneral Counsel of multinational companies.

That is why Eversheds has created this GlobalCompliance publication, which gives you a list andbrief analysis of the codes, laws and summariesrelating to corporate compliance and governancein 80 countries across the world.

In the following pages you can find the informationyou need relating to compliance in countries rangingfrom Albania to Vietnam, including every country inthe European Union, plus the European Union as such,plus the OECD, since its code of principles has inspiredmany national corporate governance codes, worldwide.

By gathering these details into one place, we hopethat we can save you time and effort when you needto get hold of the facts quickly. This is, of course, onlya reference guide. If you would like in-depth adviceon any issues relating to compliance, anywhere inthe world, then please don’t hesitate to get in touch.

For more information please contact Paul Smith.

Paul Smith is a partner with Eversheds LLP, London, and is Chairmanof the Firm’s Regulatory and Compliance Group. Paul may be reachedon +44 20 7497 9797 or at [email protected]

12

GlobalCompliance

The legal framework for good corporate governance maybe (and often is) fairly similar from country to countryand local legal terminology may often follow generallyaccepted international norms, both as to usage and legalmeaning. However, sometimes a given concept may havea different description in different places (for example:the UK term “non-executive director” (used in manycountries) may approximate to US “independent(disinterested) (non-employee) director” or “external(outside) (non-management) director”, whereas in manycountries no such apparent distinctions exist at all, asbetween types of directors).

Similarly, some terms may appear to be similar to othersbut may mean something different (for example: the UKterm “company secretary” has no exact legal equivalent inmany European countries or in the USA and should not beequated with the “corporate secretary” of a US corporation,just as some US terms which are sometimes seen in thecontext of Sarbanes-Oxley and PCAOB compliance (e.g.,“noisy withdrawal”) currently have no precise Europeanor worldwide legal equivalent). We have tried to point outsuch local differences, wherever appropriate, as well asoffering some local terminology for the term “corporategovernance”, which may vary even within the samelanguage and country, for example, from the Chineseof mainland China "公司治理" (gōngsī zhìlǐ) to the Chineseterm often used in Hong Kong "公司管制" (gōngsī guanzhì).

Global ComplianceGlobal Compliance32

Overview

In a sense, every country in the world that has a lawabout companies and a law about the public offeringof securities has rules about corporate governance andcompliance. Many countries go well beyond those basicrules and have detailed rules about virtually everyaspect of compliance and disclosure, including veryspecific rules about director independence, conflictsof interest, insider trading and shareholders’ legalremedies. These rules may be found in a company lawand in the local laws about the public sale of securities:they may also be found in local rules about accountingand about financial statements, in local stock exchangelisting and trading rules and in a wide variety of otherplaces, including commercial codes, civil codes andspecial statutes, regulations and decrees.

It would require a publication many times the size ofthis one to describe all the possibly relevant rules incountries such as China, France, Germany, the USAand the UK.

Our worldwide review of these matters provides strongevidence that corporate compliance rules everywhere arenow receiving more attention than ever before and arebecoming ever more sophisticated. Therefore, we havetried here to achieve a sensible balance between thecoverage for the countries whose laws may already befairly familiar territory to many General Counsel and thecoverage for many other countries where even the mostfundamental issues may be quite unfamiliar, such aslocating the name and key provisions of the relevantcompany law in, for example, Brazil, China, Egypt,Latvia, Mongolia, Serbia or Vietnam and determiningwhether there is a local “corporate governance” codefor publicly listed companies.

Albania

Argentina

Australia

Austria

Azerbaijan

Bangladesh

Belgium

Bosnia and Herzegovina

Brazil

Bulgaria

Canada

Chile

China

Colombia

Croatia

Cyprus

Czech Republic

Denmark

Ecuador

Egypt

Estonia

European Union

Finland

France

Germany

Greece

Hong Kong

Hungary

Iceland

India

Indonesia

Ireland

Israel

Italy

Jamaica

Japan

Jordan

Kenya

Korea (South)

Latvia

Lebanon

Lithuania

Luxembourg

Macedonia

Malaysia

Malta

Mexico

Moldova

Mongolia

Morocco

Netherlands

New Zealand

Nigeria

Norway

OECD

Pakistan

Panama

Peru

Philippines

Poland

Portugal

Romania

Russia

Serbia

Singapore

Slovak Republic

Slovenia

South Africa

Spain

Sri Lanka

Sweden

Switzerland

Taiwan

Thailand

Trinidad and Tobago

Turkey

United Arab Emirates

Ukraine

United Kingdom

United States of America

Venezuela

Vietnam

Contents

Global Compliance Global Compliance

Albania

Ligj Nr. 7638 datë 19.11.1992, "Per shoqerite tregtare"[Law No. 7638, “On Commercial Companies” dated 19November 1992, as amended], contains various provisionsrelevant to corporate governance, for example, regardingpublicly held joint stock companies, Article 74-210(management and board of directors (drejtorisë) (Article96-102), board of supervisors (këshilli mbikëqyrës)(Article 103-121), general and extraordinary meetingsof shareholders (asambleja e jashtëzakonshme) (Article128-149).

See, also, relevant provisions of Ligj "Per Kontabilitetin" (Nembeshtetje te nenit 16 te ligjit nr. 7491, datë 29.04.1991)[Accounting Law dated 29 April 1991, as amended] andrelevant provisions of Ligji Nr. 8080, "Per Letrat me Vlere",datë 01.03.1996 (Nryshuar me ligjin Nr. 8168, datë05.12.1996 dhe me Ligjin Nr. 8745 datë 22.02.2001) [LawNo. 8080, "On Securities", dated 1 March 1996, amendedby Law No. 8168 dated 5 December 1996 and Law No.8745 dated 22 February 2001] and relevant provisionsof Bursa e Tiranes - Rregullore Nr. 2 , datë 08.11.1999 ,"Listimi ne Bursen e Tiranes" [Listing Regulation of theTirana Stock Exchange, dated 8 November 1999] and therules and regulations of the Komisioni i Letrave me Vlere[Albanian Securities Commission], including rules andguidelines pursuant to Law Nr. 8080, Article 42, regardingthe continuing disclosure obligations of issuers of securities(detyrimi për informim të vazhdueshëm).

Argentina

The “Ley de Sociedades Comerciales” [Companies Act (Law19.550)], the “Ley de Oferta Pública de Títulos Valores”[Securities Act (Law 17.811)] and various Regulationsissued by the Argentine National Securities Commission(Comisión Nacional de Valores) (CNV), for publicly heldcorporations, contain corporate governance principles.

See, for example, the CNV Rules (Decree 677/2001)Regarding Transparency and Best Practices in Connectionwith Public Offerings (“Decreto 677/01 de Transparencia y

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Recommendation 7.1 (risk management and oversightpolicies), Principle 8 (management skills and qualificationsand performance assessment, including Recommendation8.1 (performance of the board, its committees, individualdirectors and key executives)), Principle 9 (fair, reasonableand fully disclosed management compensation, includingRecommendation 9.1 (detailed disclosure of remuneration,with cost-benefit analysis for shareholder review),Recommendation 9.2 (establishment of remunerationcommittee), and Recommendation 9.4 (shareholderapproval of equity-based executive remuneration)),Principle 10 (respect for legitimate interests ofstakeholders).

See, also, ASX Listing Rule 4.10 (companies to stateadherence to ASX principles, on the basis of “complyor explain”). ASX Listing Rule 4.10.3 requires listed entitiesto disclose in each annual report the extent to which theyhave followed the Guidelines during the reporting period.ASX Listing Rule 12.7 requires the top 500 listed entitiesto have an audit committee and the top 300 to have anaudit committee that is constituted in accordance withRecommendation 4.3 of the Guidelines. There are alsovarious related guidance notes and guidance consolidations.

Note: On 2 November 2006, the ASX Corporate Governance Council exposeda Draft (and related Consultation Paper) setting forth various proposedchanges to its Principles of Good Corporate Governance and Best PracticeRecommendations. The revised Principles are intended to have an effectivedate of 1 July 2007.

Austria

Österreichischer Corporate Governance Kodex [AustrianCode of Corporate Governance], September 2002, asamended through January 2006, Article II (shareholdersand the general meeting: one share one vote (Article II.2),takeover bid acceptance or rejection solely withinthe power of shareholders (Article II.8)), Article III(cooperation between supervisory board and managementboard: specific reporting duties of management board(Article III.9)), Article IV (management board: fundamentalduties regarding the conduct of the business (ArticlesIV.13-18), rules regarding conflicts of interest and self-dealing (Articles IV.19-26), management board

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Mejores Prácticas para el Mercado de Capitales”), referring,inter alia, to the Principles of Corporate Governance of theAmerican Law Institute. See, Decree 677/2001, Article 1(general principles), Article 5 (required disclosures to theCNV), Article 12-15 (audit committees and external audits),Article 34 (insider trading and market abuse) and relatedResolutions 400 and 401, dated 22 March 2002.

See, further, The Companies Act (Law 19.550), Article 58-62, 72-73 (management and representation), Article 61-65(accounting and financial statements: see, also, Código deComercio [Commercial Code, Article 53]), Article 113-115(judicial intervention in case of wrongdoing), Article 233-244 (conduct of shareholder meetings), Article 255-279(appointment, duties and remuneration of directors,shareholder remedies), Article 217-273 (directorconflicts of interest).

See, also, the Securities Act (Law 17.811], Article 16-21(public offering of securities).

Australia

Principles of Good Corporate Governance and BestPractice Recommendations (ASX Corporate GovernanceCouncil), 31 March 2003, Principle 1 (effective foundationfor management and oversight, including specificenumeration of board responsibilities), Principle 2(board structure and definition of independence,including Recommendation 2.1 (majority of board to beindependent), Recommendation 2.4 (establishment ofnomination committee), Principle 3 (ethics, standards oftransparency, insider trading, including Recommendation3.1 (code of ethics)), Principle 4 (integrity in financialreporting, including Recommendation 4.1 (managementcertification of company financial statements, Recom-mendation 4.2 (establishment of audit committee)),Principle 5 (timely and balanced disclosures, in general),Principle 6 (safeguarding shareholders rights, commun-ications with shareholders and Attachment A = detailedguidelines for notices and conduct of shareholdersmeetings, including Recommendation 6.2 (external auditorto attend shareholder meetings and be available to answerquestions)), Principle 7 (risk management, including

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of shareholders, including availability of legal redress,including Annotations III.A-C (equal rights, protection ofminority shareholders from abuse, prohibition of abusiveinsider trading, disclosure of personal interests bymanagement)), Principle IV (protection of stakeholders,creditors and employees, including Annotation IV.E,avenues for bona fide reporting of suspected corporatewrongdoing and protection of those who communicatetheir concerns), Principle V (disclosure and transparency,including Annotations V.A-D (proper and timely disclosureof financial matters, aggregations of major shareholdings,related party transactions, annual independent audits)),Principle VI (general responsibilities of the board ofdirectors, including Annotations VI.A-E (duty of careand good faith, objective duty of at least a majority ofindependent directors to manage, monitor and guide,including the monitoring of management compensation,of the company’s financial accounting and of managementconflicts of interest).

Note: The Azerbaijan Corporate Governance Project (ACGP) is beingimplemented by the International Finance Corporation (IFC) and is funded withsupport from the State Secretariat for Economic Affairs of Switzerland.

BangladeshCode of Corporate Governance for Bangladesh: Principles &Guidelines for Best Practices in the Private Sector, FinancialInstitutions, State-Owned Enterprises & Non-GovernmentalOrganisations (March 2004), prepared with support fromthe Bangladesh Enterprise Institute: Board Issues (dutiesof the board of directors, membership criteria, remuneration,committees, directors’ report within the Annual Report,board Code of Conduct), Role of Shareholders (shareholders’handbook, general meetings of shareholders), FinancialReporting, Auditing and Non-Financial Disclosures(accounting standards, external auditors, internal audit),Sector-Specific Provisions (financial institutions, state-owned enterprises and non-governmental organisations),plus: (1) Basic Checklist for Implementation of the Code ofCorporate Governance, (2) various Annexes with detailedcommentary and guidelines, sample conflict of interestpolicy and terms of reference for a finance committee andaudit committee) and (3) various Appendices (CumulativeVoting: a Brief Description; Sample Shareholders’Handbook; Sample Contents of an Annual Report).


compensation (Articles IV.27-31)), Article V (supervisoryboard: fundamental duties regarding the supervision ofthe business (Articles V.32-37), appointment of themanagement board (Article V.38), audit committees(Articles V.39-43), rules regarding conflicts of interestand self-dealing (Articles V.44-49), supervisory boardcompensation (Article V.50-51), qualification, constitutionand independence of board members (Articles V.52-58),employee representation, including one-third parity rule(Article V.59)), Article VI (auditing and transparency:transparency (Article VI.60), financial reporting anddisclosure (Articles VI.61-67), investor relations, Internet(Articles VI.68-73), audits and auditor independence(Articles VI.74-80)). Annex 1 covers guidelines forindependence, Annex 2 contains a brief overview ofthe Austrian Stock Corporation Act.

Each item is clearly identified as L (legal requirement),R (highly recommended), C (comply or explain).

See, also, amendments in February 2005 (specificallyaffecting Articles 19, 20, 62, 66, 67 and 69 as legalrequirements, in conformity with the amended AustrianBörsegesetz [Stock Exchange Law] and amendedRechnungslegungsgesetz [Accounting Law]. See,also, amendments in January 2006 (specificallyaffecting Articles 5, 25, 40, 48, 56 and 77 as legalrequirements, in conformity with the amended AustrianGesellschaftsrechtsänderungsgesetz [Corporate LawAmendment Act 2005] and the recommendations ofthe European Commission regarding the tasks of thesupervisory board and the remuneration of directors.

Azerbaijan

�Ə�T-in Korporativ �darəetmə Prinsipləri = Azerbaijaniversion of Organisation for Economic Co-operation andDevelopment: OECD Principles of Corporate Governance(April 2004), Principle I (general outline of corporategovernance goals and framework), Principle II (generalprotection of shareholder rights, including Annotations II.A-C (voting, election and removal of directors, access toinformation, sharing in profits, certain disclosures byinstitutional investors)), Principle III (equitable treatment

nietbeursgenoteerde ondernemingen] (CorporateGovernance: Recommandations à l’attention desentreprises non cotées en bourse).

Bosnia and Herzegovina

See, Zakon o Vrijednosnim Papirima (Službene novineFederacije BiH, broj 39/98 i 36/99) [Law on Securities,Official Gazette item 36/99], required disclosuresin prospectus (Articles 18-14), required periodicaldisclosures (Articles 109-112 and 117-119 (insiderinformation)), penalties (Articles 126-132) and see,generally, the Standarde Upravljanja Dioničkim Društvima[Standards of Corporate Governance] issued (16 May2001, 26 June 2001 and 11 April 2002) by the Komisijaza vrijednosne papire Federacije Bosne i Hercegovine[Bosnia and Herzegovina Securities Commission](Standard I.3, conflicts of interest; Standards II.1.1-II.1.9, conduct of the general meeting of shareholders;Standards II.2.1-II.2.10, duty of supervisory andmanagement boards to act in the best interest of thecompany and its shareholders).

See, also, Zakon o Privrednim Društvima (Službene novineFederacije BiH 23/99) [Law on Business Companies,Official Gazette item 23/99, as amended], duties andresponsibilities of supervisory board (Articles 259-274),duties and responsibilities of management board andexecutive directors (Articles 275-280), functions andduties of audit board (Articles 282-286), penalties(Articles 375-380).

Brazil

Código das Melhores Práticas de Governança Corporativa[Code of Best Practice of Corporate Governance, of theBrazilian Institute of Corporate Governance] (InstitutoBrasileiro de Governança Corporativa (“IBGC”)), 30 March2004, Article 1.2 (“one share = one vote” concept), Article1.5-1.5.8 (conduct of General Assembly of shareholders),Article 2.1-2.40 (duties and responsibilities of the Boardof Directors and Advisory Board, including the audit

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See, also, relevant provisions of The Companies Act(Bangladesh), 1994, as amended and as referenced in theCode of Corporate Governance, and see, also, the Rules,Regulations, Orders, Directives, Notifications and Guidelinesof the Bangladesh Securities & Exchange Commission.

Belgium

Belgische Corporate Governance Code (Code Belge deGouvernance d’Entreprise) [Belgian Code on CorporateGovernance], 9 December 2004, Principles 1 and 9(company to adopt and disclose a clear governancestructure, including details of its required disclosures(Appendix F)), Principle 2 (board composition, standards,including criteria of independence (Appendix A)), Principles3-4 (integrity and diligence required of directors, standardsfor director selection and evaluation, including avoidance ofinsider trading and market abuse (Appendix B)), Principle5 (board committees, including an audit committee(Appendix C), a nomination committee (Appendix D), aremuneration committee (Appendix E)), Principle 6 (clearmanagement structure and disclosure thereof), Principle7 (fair and reasonable remuneration of directors andexecutive managers, including rules about options andvesting periods (Guideline 7.13)), Principle 8 (shareholderrights and meetings).

See, also, Vergelijkende studie van de informatie inzake“corporate governance” die door de genoteerdevennootschappen wordt gepubliceerd in het “corporategovernance charter” (Etude comparative sur lesinformations en matière de "gouvernance d'entreprise"publiées par les entreprises cotées dans la "Charte degouvernance d'entreprise") [a comparative study ofcorporate governance information as published by listedcompanies in their corporate governance charters] (studyavailable in Dutch and French published in December 2006by the Belgian CBFA (Banking, Finance & InsuranceCommission)).

For non-listed companies see Code Buysse: CorporateGovernance for Non-listed Companies (September 2005)[Corporate Governance: Aanbevelingen voor

Global Compliance1110

Bulgaria

Кодекс на корпоративното управление [Code ofCorporate Governance], binding upon all issuers whosesecurities are listed on the Българска Фондова Борса -София [Bulgarian Stock Exchange – Sofia] (January 2007),Section I (basic principles of application), Section II(protection of shareholder rights, including timelydisclosure of relevant information), Section III (dutiesof management bodies, including corporate governancesystems (Article 6a.1-6a.1.7.3), composition of the boardof directors (Article 6a.2-6a.2.3), duties of the managementboard (Article 6b.2-6b.2.7), independent members of theboard of directors and supervisory board (Article 8.1-8.3),compensation of members of the management andsupervisory bodies (Article 9.1-9.5), conflicts of interestand related transactions (Article 10.1-10.3)), Section IV(various rules regarding disclosure, including accounts andaudit of annual financial statements (Article 12.1-12.7.1)and disclosure of information via the Internet (Article 13.1-13.4)).

Note: The above-mentioned Code was provisionally adopted by the Board ofDirectors of the Bulgarian Stock Exchange – Sofia, pursuant to Minutes of theirofficial Proceedings No. 23 dated 12 October 2006, as amended pursuant totheir official Proceedings No. 3 dated 29 January 2007. As of April 2007,various Bulgarian experts, including the Stock Exchange and the BulgarianFinancial Supervision Commission, were working towards the finalization of a“National Corporate Governance Code”, applicable to all Bulgarian companies,whether listed on a stock exchange or not.

See, also, Търговски Закон [Commercial Code], Prom. SG.48/18 June 1991, and various amendments, including SG.58/27 June 2003 and SG. 66/12 August 2005, with thespecific duties of directors, officers and managers beingset forth at Article 233-244.

Закон За Публичното Предлагане на Ценни Книжа [Lawon the Public Offering of Securities], Prom. SG. 114/30 Dec1999, and various amendments, including SG. 37/4 May2004 (setting forth various rules and guidelines regardingproper company management and conduct) and SG No.86/24.10.2006, effective 1 January 2007.

And see, Правилник на "Българска Фондова Борса -София" АД [Rules and Regulations of the Bulgarian StockExchange (Sofia)], amended through 1 March 2007.

Global Compliance

committee (Article 2.9-2.9.2)), independent external andinternal directors (Article 2.11-2.12 and 2.23), directorcompensation (Article 2.21, 3.5.2, and 3.9), internal auditsand relationship with the Fiscal Council (Article 2.34-2.35),Article 3.1-3.6 (duties and responsibilities of management,including the CEO, good corporate governance practices(Article 3.5.1) and internal controls (Article 3.6)),Article 4.1-4.7 (independent auditing and non-auditservices (Article 4.6)), Article 5.1-5.9 (functions and dutiesof the Fiscal Council), Article 6.1-6.2.2 (conflicts of interestand related party transactions).

See, also, Recomendações da CVM sobre GovernançaCorporativa (Comissão de Valores Mobiliários (= theSecurities and Exchange Commission of Brazil) [CVMRecommendations on Corporate Governance], June2002, Recommendation I (shareholder rights, shareholdermeetings, shareholder control agreements, votingprocesses), Recommendation II (structure andresponsibilities of the board of directors, committees),Recommendation II.3 (director to be appointed bypreferred shareholders [UK = "holders of preferenceshares"] (until the year 2006)), Recommendation III(protection of minority shareholders, including tag-alongprovisions), Recommendation III.4 (related partytransactions), Recommendation III.6 (arbitration of certaindisputes between the company and its shareholders andbetween minority and majority shareholders),Recommendation IV (accounts and audits, includingRecommendation IV.2, regarding the Fiscal Council).

See, also, Lei nº 6.404, de 15 de dezembro de 1976, Leidas sociedades por ações [Brazilian Corporations Law], asamended and consolidated as of 1 November 2001. Thereare also various relevant CVM Instructions, including CVMInstruction Nº 8, dated 8 October 1979 (relating to marketmanipulations) and CVM Instruction Nº 308, dated 14 May1999 (relating to audit independence).


relating to the audit and finance committee, executive committee, humanresources and corporate governance committee), Guideline (Ligne Directrice)13 (audit committee, including specific examples of required disclosures and“enhanced” disclosures).

Chile

In Chile, the principal laws relating to good governanceof listed companies are to be found in Ley Nº 18.045 deMercado de Valores [Securities Market Law] and Ley Nº18.046 de Sociedades Anónimas [Corporations Law], asamended, which, in turn, should be read in the context ofLey Nº 19.705, Regula las Ofertas Públicas de Adquisiciónde Acciones (OPAS) y establece régimen de GobiernosCorporativos [Rules for Public Offers (tender offers) for thePurchase of Stock and Establishing a Corporate GovernanceRegime], dated 14 December 2000, incorporated into theforegoing laws. There are also various other relevant rulesand regulations.

See, further, for example, Ley Nº 18.046 de SociedadesAnónimas [Corporations Law], Article 21 (principle of oneshare one vote), Article 31-50 (corporate management,including duties of care and good faith, remuneration,disqualifications, conflicts of interest, conduct of directors’meetings, transparency and accountability), Article 50-bis(board committees), Article 55-72 (conduct of shareholdermeetings), Article 73-77 (accounting and financialstatements), Article 133-134 (penalties).

China

Code of Corporate Governance for Listed Companies[上市公司治理准则] in China, 中国证券监督管理委员会 [ChinaSecurities Regulatory Commission], 7 January 2001(Zhengjianfa No.1 of 2002): Article 1 (establish programmeof corporate governance 公司治理), Articles 2, 43 (shareholderequal rights and treatment), Article 3 (shareholders’ rightto know of and participate in major decisions), Article 12(related party transactions), Article 14 (no loans, guaranteesfor personal benefit of shareholders), Article 23 (“personnel”to be independent), Article 25 (sound financial andaccounting management), Article 26 (board to operate

Global Compliance

Canada

The Toronto Stock Exchange (Bourse de Toronto) (TSX)has published a detailed guide to national good corporategovernance and disclosure: The “TSX Guide to GoodDisclosure for National Instrument 58-101 Disclosureof Corporate Governance Practices (NI 58-101) andMultilateral Instrument 52-110 – Audit Committees (MI52-110) (as of January 2006)” (version 1.0). In French,see, “Guide de la TSX sur l’information à fournir selon leRèglement 58-101 - Information concernant les pratiquesen matière de gouvernance (le règlement 58-101) et leRèglement 52-110 - Comités de vérification (le règlement52-110) (janvier 2006)”.

The Guide needs to be followed with due attention torelevant Canadian federal and provincial laws regardingcompanies and the offering of securities to the public. See,for example, the Ontario Corporations Act R.S.O. 1990,Chapter C.38 (Loi sur les personnes morales L.R.O. 1990,Chapitre C.38), as amended, Article 24 (prohibition of loansto directors), Article 66 (removal of directors), Article 69(payment of President and directors), Article 71 (disclosureby directors of interests in contracts), Article 73 (reportsby insiders), and numerous other relevant provisions. See,also, various relevant provisions of the Canada BusinessCorporations Act, 1985 (R.S., 1985, c. C-44), as amended,for example, Article 122(1) (duty of care of directors andofficers).

Other major stock exchanges may have their own rules,policies and guidelines. See, for example, relevant rulesof the Bourse de Montréal.

Note: The foregoing TSX Guide replaces the TSX publication entitled CorporateGovernance: A guide to good disclosure (Régie d’entreprise: Guide dedivulgation), December 2003, Guideline (Ligne Directrice) 1 (detailed rulesregarding supervision and management of the company, strategic planningprocesses, assessment of principal risks, succession planning, communicationspolicies, integrity of internal controls), Guidelines (Lignes Directrices) 2 and 12(board independence, including specific examples of required disclosures and“enhanced” disclosures, definition of “unrelated director” (“directeur non relié”)and “related director” (“directeur relié”), Guideline (Ligne Directrice) 3(individual unrelated directors, including specific examples of requireddisclosures and “enhanced” disclosures), Guideline (Ligne Directrice) 4(nominating committee), Guideline (Ligne Directrice) 5 (assessment of boardeffectiveness), Guideline (Ligne Directrice) 6 (director education and ongoingtraining), Guideline (Ligne Directrice) 8 (compensation of directors), Guideline(Ligne Directrice) 9 (committees and outside directors, with specific examples


For specific industry sectors, see, further:

Securities – General

Securities Law of the People’s Republic of China [2005证券法], adopted by the 18th Session of the StandingCommittee of the 10th National People’s Congress on27 October 2005, and effective as of 1 January 2006.Among other things, the Securities Law addresses thequalifications of personnel as well as the managementof securities firms in China.

Measures on the Regulation of the Qualification ofDirectors, Supervisors and Senior Management Personnelof Securities Companies[中国证券监督管理委员会证券公司董事，监事和高级管理员任职资格监管理办法], issued by the China Securities RegulatoryCommission on 30 November 2006 and effective as of 1December 2006.

Guidelines on the Social Responsibility of Listed Companies[深圳证券交易所上市公司社会责任指引], issued by theShenzhen Stock Exchange on 25 September 2006 andeffective as of the same date.

Guidelines on the Internal Control of Listed Companies[深圳证券交易所上市公司内部控制指引], issued by ShenzhenStock Exchange on 1 July 2006 and effective as of thesame date.

Securities – Funds

Guiding Opinions on the Administration of InvestmentManagement Personnel of Fund Management Companies[中国证券监督管理委员会基金管理公司投资管理人员管理指导意见],issued by the China Securities Regulatory Commission on27 October 2006.

Guidelines (Trial) for Corporate Governance of SecuritiesInvestment Fund Management Companies[中国证券监督管理委员会证券投资基金管理公司治理准则（试行）],issued by the China Securities Regulatory Commission on15 June 2006 and effective as of the same date.

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in an independent manner), Articles 28-32 (electionof directors), Articles 33-39, 41 (directors’ duties andrequisite skills), Article 37 (director training), Article 38(indemnification of directors), Article 39 (director liabilityinsurance), Article 43 (directors to comply with law),Articles 44-48 (directors’ meetings and minutes), Articles49-51 (independent directors), Articles 52-58 (committees:Article 53 – strategy; Article 54 – audit; Article 55 –nomination; Article 56 – remuneration), Articles 59-68(supervisory board) Articles 69-72 (performanceassessment), Articles 73-76 (selection of managementpersonnel), Articles 77-80 (incentive and disciplinarysystem for management), Articles 87-90 (informationdisclosure and transparency), Article 91 (disclosure recorporate governance), Articles 92-94 (disclosure ofcontrolling shareholder interests).

See, also, Guidelines for Introducing Independent Directorsto the Board of Directors of Listed Companies[关于在上市公司建立独立董事制度的指导意见], 16 August 2001(Zhengjianfa No. 102 of 2001) and Provisional Code ofCorporate Governance for Securities Companies (ChinaSecurities Regulatory Commission) dated 15 January 2004.

The new PRC Company Law 2005 (2005 公司法) (effectivefrom 1 January 2006) contains numerous provisionsaffecting corporate governance, including provisionsrelating to insider transactions, required disclosures andreporting obligations, stricter director liability and enhancedmechanisms for shareholder lawsuits. See, for example,Article 87 (disclosures in offering prospectus), Article 101-108 (annual meeting of shareholders), Article 109-113(composition and duties of the board of directors), Article114 (corporate manager may be appointed or dismissed bythe board of directors), Article 116 (prohibition of loans todirectors and senior managers), Article 117 (disclosure ofexecutive compensation), Article 118-120 (compositionand duties of the board of supervisors), Article 123(independent directors of listed companies), Article 125(conflicts of interest affecting directors), Article 147-159(qualifications, disqualifications and fiduciary duties ofdirectors and supervisors), Article 150 and 153 (liability ofdirectors and supervisors for damages to the company andexposure to litigation by the shareholders), Article 170-172and 202-203 (audits and accounts).


Insurance

Administrative Provisions on the Post-holding Qualificationsof Directors and Senior Managers of Insurance Companies[保险公司董事和高级管理人员任职资格管理规定], issued by theChina Insurance Regulatory Commission on 12 July 2006and effective as of 1 September 2006.

Circular on Relevant Issues Concerning Strengtheningthe Enforcement Power of Internal Control of PropertyInsurance Companies[中国保险监督管理委员会关于加强财产保险公司内控建设提高内控执行力有关问题的通知], issued by the China InsuranceRegulatory Commission on 15 March 2006 and effectiveas of the same date.

ColombiaThe Código de Buen Gobierno de la Bolsa de Valores deColombia S.A. (30 January 2006), promulgated by theBolsa de Valores de Colombia S.A. [Colombian StockExchange, being the integrated stock exchanges of Bogotá,Medellín and Occidente]: Article 2.1.1.1-2.1.1.5 (propertreatment of shareholders and resolution of disputes),Article 3.1.1.1-3.2.3.1 (disclosure, reporting andtransparency, including disclosure of financial informationat shareholders’ meetings), Article 3.3.1.1-3.3.1.2(information available to the board of directors and itscommittees), Article 3.4.1.1 (access to and disclosureof information regarding corporate governance), Article3.4.1.4-3.4.1.10 (various required publications, includingwebsite disclosures), Article 4.1.1.1-4.1.4.17 (role andduties of the board of directors, including their nomination,remuneration and evaluation, and their committees,including the administrative and finance committee, thecorporate governance committee, the audit committee),Article 6.1.1.1-6.2.1.1 (internal and external controls),Article 7.1.1.1-7.1.1.4 (conflicts of interest). The Codeis applicable to the Stock Exchange and is relevant tocompanies whose securities are listed on it.

See, also, the Reglamento General de la Bolsa de Valoresde Colombia S.A. [General Regulations of the ColombianStock Exchange], amended through 2 February 2007,and relevant provisions of Colombian company lawand accounting regulations.

Global Compliance

Provisions on the Administration of Supervisors ofSecurities Investment Fund Management Companies[中国证券监督管理委员会证券投资基金管理公司督察长管理规定],issued by the China Securities Regulatory Commission on8 May 2006 and effective as of the same date.

Securities – Market Participants

Administrative Measures on Securities Companies[中国证券监督管理委员会证券公司管理办法], issued by theChina Securities Regulatory Commission on 28 December2001 and effective as of 1 March 2002.

Rules on the Establishment of Foreign-invested SecuritiesCompanies [中国证券监督管理委员会外资参股证券公司设立规则],issued by the China Securities Regulatory Commission on 1June 2002 and effective as of 1 July 2002.

Provisional Regulations on Administration of Qualificationsof Domestic and Foreign Securities Institutions Engaging inForeign-invested Share Business[境内及境外证券经营机构从事外资股业务资格管理暂行规定],issued by the China Securities Regulatory Commission on12 November 1996 and effective as of 1 December 1996.

Banking

Guidelines for the Corporate Governance and RelevantSupervision of State-Owned Commercial Banks[国有商业银行公司治理及相关监管指引], issued by the ChinaBanking Regulatory Commission on 18 April 2006 andeffective as of 24 April 2006. The “Corporate Governanceand Supervision Guidelines of the Bank of China and theChina Construction Bank” were repealed on the same date.

Guidelines for Due Diligence Criteria for the Board ofDirectors of Commercial Banks Limited by Shares (Trial)[股份制商业银行董事会尽职指引(试行)], issued by the ChinaBanking Regulatory Commission on 5 September 2005and effective as of the same date.


See, also, relevant provisions of Ο Περί Εταιρειών Νόµος,Κεφ. 113 [Companies Act], Chapter 113 of the Law ofCyprus, including Law No. 167(I)/2003, Law No. 92(I)/2004amending Section 3(2) of the reservation within theCompanies (Amending) Law of 2001 as amended bythe Companies (Amending) Law of 2003 and Law No.24(I)/2005 of 18 March 2005, amending Section 4(1)(a)of the basic law, and especially Πίνακας Α: Κανονισµοί γιαδιεύθυνηση εταιρείας περιορισµένης ευθύνης µε µετοχέςπου δεν είναι ιδιωτική εταιρεία [First Schedule, Table Athereto (Regulations for management of a company limitedby shares, not being a private company)] and Οι περίΑξιών και Χρηµατιστηρίου Αξιών Κύπρου (Καταχώρηση,∆ιαπραγµάτευση και Εκκαθάριση Αϋλων Κινητών Αξίων)Κανονισµοί [Cyprus Securities and Stock Exchange(Admission, Trading and Settlement of Stocks)Regulations].

Czech Republic

Kodex správy a řízení společností založeny na PrincipechOECD (Code of Corporate Governance based upon OECDPrinciples, originally published by the Komise pro cennépapíry = Czech Securities Commission (September 2004),Chapter 1 (adoption of effective corporate governanceprogramme), Chapter 2 (protection of shareholder rights,equal treatment and access to information, includingdisclosure of conflicts of interest by certain institutionalinvestors, limitation of anti-takeover devices), Chapter3 (equitable treatment of all shareholders, prohibitionof insider trading by directors and duty to disclosetransactions in which they have a personal financialinterest, access by shareholders to legal remedies),Chapter 4 (role of stakeholders in corporate governance),Chapter 5 (disclosure and transparency in general,including accounting and audit matters and release ofinformation to analysts), Chapter 6 (responsibilities ofthe board of directors and supervisory board, includingspecific roles regarding executive compensation andmonitoring potential management conflicts of interest,and establishment of audit, nomination and remunerationcommittees), Annex 2 (detailed rules about corporategovernance board committees, namely, the auditcommittee, the nomination committee and the

Global Compliance

Croatia

Corporate Governance Code (Draft, September 2005),Varaždin Stock Exchange and Zagreb Stock Exchange, PartA (public announcements, price sensitive information (A.1),annual and interim reports (A.2-A.3), insider information(A.8)), Part B.1 (general meeting of shareholders, keydecisions (B.1.vi)), Part B.2 (supervisory board,compensation (B.2.v), conflicts of interest (B.2.vii),committees (B.2.viii)), Part B.3 (management,compensation (B.3.iii), conflicts of interest (B.3.vi)), Part C(audit and internal control mechanisms, internal audit andinternal control supervision (C.2)), Part D (relationshipswith investors).

Most of the proposed Rules have been incorporated into theStock Exchange Rules.

See, also, Company Law (Zakon o Trgovačkim Društvima)(1993 and as amended), for example, Article 422(management board and management of the company’sbusiness) and Article 434 (mandatory supervisory board).See, also, Securities Market Law (Odluku o ProglašenjuZakona o Tržištu Vrijednosnih Papir), Law No. 01-081-02-2614/2, 8 July 2002, as amended (and related Rules(“Pravila Zagrebačke burze”) of the Zagreb Stock Exchange(2003, as amended in 2006).

Cyprus

Κώδικας Εταιρικής ∆ιακυβέρνησης (Corporate GovernanceCode), Cyprus Stock Exchange, revised January 2007,Provision A (directors: the board of directors, includingrelated party transactions, independence, training, boardbalance between internal and external directors, prohibitionof evergreen contracts), Provision B (director remuneration,including options and shares, employment contracts,disclosure), Provision C (audit committee, accountability,auditors and internal controls), Provision D (relations withshareholders, including notice and conduct of annualmeetings, equitable treatment of shareholders, relatedparty transactions), plus Addendum 1 (disclosure ofremuneration policy) and Addendum 3 (share-basedremuneration).


annual shareholders’ meetings, preparation and content ofthe annual accounts and other financial data, adoption ofa sound corporate governance programme (in accordancewith The Nørby Committee’s recommendations in December2001) and adoption of an investor relations programmein line with the Handbook, including appointment of aninvestor relations officer and posting of key data at thecompany website.

See, also, Anbefalinger for god selskabsledelse 2005(Københavns Fondsbørs’ komité for god selskabsledelse[Corporate Governance Recommendations 2005Copenhagen Stock Exchange Committee on CorporateGovernance], being Chapter 6 of the aforementionedHandbook, as amended through 15 August 2005, witheffect from 1 January 2006, and generally based uponthe “følg-eller-forklar” principle (comply or explain), Part I(role of the shareholders and their interaction with themanagement of the company), Part II (role of stakeholders),Part III (openness and transparency), Part IV (tasks andresponsibilities of the supervisory board), Part V (compositionof the supervisory board), Part VI (remuneration ofmembers of the supervisory board and the executiveboard), Part VII (risk management), Part VIII (audit)and Appendix A (on supervisory board committees).

See, also, relevant provisions of Aktieselskabsloven (lovom aktieselskaber) [Danish Public Companies Act], Act no.649 of 15 June 2006, as amended by Act no. 108 of 7February 2007.

Ecuador

The Instructivo Societario para la constitución, aumentode capital y más actos de las compañías mercantilessometidas al control de la Superintendencia de Compañías[detailed Guidelines for private and public companies,prepared by the office of the Ecuador Commissioner ofCorporations] (October 2006) contains numerousprovisions that are relevant to good corporate governance,for example, Article 1.2-1.2.3 (relating to joint stockcompanies) and various forms and recommendationsregarding listed company charters and minutes (pages36-37, 54-55), administrative governance (pages 37-40,

Global Compliance

remuneration committee), Annex 3 (detailed guide tobest practice for executive boards, including guidelinesfor conflicts of interest and loans and credit benefits todirectors), Annex 4 (model code of corporate ethics).

See, also, relevant provisions of Zákon č. 513/1991 Sb.,Obchodní Zákoník, ve znění pozdějších předpisů[Commercial Code, Act No. 513 of 1991], as variouslyamended: For public limited liability companies (joint stockcompanies = akciová společnost), see Article 154-220zband more specifically: Article 173 (stanovy = statutes(deed of incorporation)), Articles 178 ff. (práva a povinnostiakcionářů = rights and duties of shareholders), Articles 184ff. (orgány společnosti = “organs” (authoritative bodies)of the (joint stock) company), Article 184 (valná hromada= General Meeting of Shareholders), Articles 191 ff.(představenstvo = board of directors), Article 196 (zákazkonkurence = prohibition against competition by directors,against the company), Articles 197 ff. (dozorčí rada =supervisory board), Article 220b (zpráva představenstvaa dozorčí rady = reports by board of directors andsupervisory board), Article 220j (ochrana věřitelů =protection of creditors), Article 220l (odpovědnost za škodu= liability for damages), Article 220z (právo na informace= right to information), plus various general provisions,including Article 17 (obchodní tajemství = trade secrets),and Articles 41 ff. (hospodářská soutěž = economiccompetition, podplácení = bribery at Article 49, ohrožovánízdraví a životního prostředí = endangering of health ofothers and of the environment) at Article 52). For privatelimited liability companies (= společnost s ručenimomezeným), see Article 105-153e.

Denmark

Håndbog for udstedere [Handbook for Issuers] (listedon the Copenhagen Stock Exchange), which includes (asChapter 8 thereof) a Guide to Investor Relations (June2005), with detailed guidelines and analysis for a range ofissues designed to focus on fair treatment of shareholdersand disclosure of information, including fair pricing of stock,timely disclosure of price sensitive information (includingrelations with analysts and journalists), equal treatment ofshareholders, ban on use of inside information, conduct of


external auditor), Article 6 (audit committee), Article 7(disclosure of social policies), Article 8 (avoiding conflictsof interest).

Note: The Code was prepared by the Chairman of the General Authority ofInvestment and Free Zones, together with the Chairman of the Cairo andAlexandria Stock Exchange, and is in accordance with the corporate governanceprinciples issued by the OECD and a number of countries including Malaysia,the Philippines and South Africa.

See, also, relevant provisions of the Company Law (Law159/1981 and Law 159/1984, as amended, plus relatedExecutive Regulations), the Capital Market Law (Law95/1992, as amended, plus related Executive Regulations)and the Rules and Regulations of the Egypt Capital MarketAuthority, including CMA decision no. 11/2007, dated 13March 2007, regarding executive rules of corporategovernance for unlisted securities companies.

Estonia

Hea Ühingujuhtimise Tava (“HÜT”)(Corporate GovernanceRecommendations), adopted by the Tallinn Stock Exchangein September 2005 (with effect from 1 January 2006 andwith enforcement in effect from 1 January 2007), exerciseof shareholder rights (Articles 1.1-1.3.3), managementboard duties, composition and responsibilities (Articles 2.1-2.3.4, remuneration (2.2.3-2.2.7), conflicts of interest(2.3)), supervisory board duties (Articles 3.1- 3.3.4,remuneration (3.2.4-3.2.5), conflicts of interest 3.3)),relationships between management board and supervisoryboard (Articles 4.1-4.3), publication of information (Articles5.1- 5.6), financial reporting and audits (Articles 6.1-6.2.6), independence requirements and criteria (Annex).

See, also, HEX Tallin (Tallinna Börs) [Tallin Stock Exchange,Listing Requirements for Issuers], April 2006, Article 1(general provisions, including items required to bedisclosed), Article 2 (ongoing duties of disclosure, includinginclusion of data within groups of related companies (Article2.1.5), duty to correct errors (Article 2.2), permissible andmandatory means of disclosure (Articles 2.4.1-2.4.9)),Article 3 (detailed items and categories of informationto be disclosed), Article 4 (confidential information andprohibition of insider trading (Articles 4.4.1-4.6.3)),

Global Compliance

55-56) and financial and accounting matters (pages40 and 56).

See, also, relevant provisions of the Codificación de la Leyde Compañias (Codificación No. 000. RO/312 de 5 denoviembre de 1999) [Codified Company Law of 1999, asamended], for example, Article 143-159 (the joint stockcompany), Article 160-199 (shares and shareholders ofjoint stock companies), Article 230-273 (board of directorsand management), Article 274-300 (financial andaccounting matters), Article 318-329 (external audits).

Egypt

Egypt Capital Market Authority, Principles of CorporateGovernance based upon OECDPrinciples (April 2004), Article I (setting up an effectivecorporate governance framework), Article II (rightsof shareholders, including access to information andinvolvement in key decisions affecting the company,including compensation of the directors and executivemanagement, with specific right of approval of equitybased compensation (Article II.C.3)), Article III (equitabletreatment of shareholders), Article IV (role of shareholdersin corporate governance), Article V (disclosure andtransparency, including audits (Articles V.C-V.D)), ArticleVI (responsibilities of the board, including monitoringof conflicts of interest, transactions with related partiesand abuse of corporate assets).

See, the related Minister of Investment Decree no.332/2005 (5 October 2005) approving and issuing theaforementioned manual of rules and standards of corporategovernance (also adopted by the Egyptian Institute ofCorporate Directors (EIoD)) and Minister of InvestmentDecree no. 433/2006 regarding Egyptian AccountingStandards.

See, Code of Corporate Governance for Private Sector inEgypt, Egyptian Institute of Directors (EIoD) (October2005), Article 1 (scope of implementation), Article 2(general meeting of shareholders), Article 3 (board ofdirectors), Article 4 (internal audit committee), Article 5


and 2 (IFRS-2 = accounting for share based paymentsto company management) and International AccountingStandards (IASs) Nos. 12, 16, 19, 32, 33, 38 and 39)(adopted on 4 February 2005)

And see Regulations 2236/2004, 2237/2004 and2238/2004 (all on 29 December 2004), amending,implementing and supplementing Regulations1606/2002 and 1725/2003

And see Regulation 2086/2004 (19 November 2004)(relating to IAS 39) and Regulation 707/2004 (6 April2004) (relating to IFRS-1 and first-time application ofIAS, replacing SIC-8)

EU Regulation 1910/2005 (8 November 2005), EURegulation 2106/2005 (21 December 2005) and EURegulation 108/2006 (EU Official Journal, 27 January2006), amending Regulation 1725/2003 adoptingcertaininternational accounting standards in accordancewithRegulation 1606/2002

Directives

68/151/EEC Company internal accounts (safeguardsand member country equivalents) See also Directives78/660/EEC, 2003/58/EC

77/91/EEC Capital safeguards (public limitedliability companies) See also Directive 2006/68/EC

78/660/EEC Company internal accounts (certaincompanies) ("Fourth" Company Law Directive)[25 July 1978] See also Directive 2006/43/EC

78/855/EEC Mergers of public limited liability companies("Third" Company Law Directive) [9 October 1978]

82/891/EEC Division of public limited liability companies(Sixth Company Law Directive)

83/349/EEC Consolidated accounts (Seventh Accounting[Company Law] Directive) See also Directive 2006/43/EC

Global Compliance

Article 5 (financial reports, including matters relatingto audits), Article 7.13 (matters subject to shareholderapproval), Articles 7.18.1-7.19.3 (conditions anddisclosures relating to share options granted todirectors, managers and employees).

See, in addition, relevant provisions of the Äriseadustik[Commercial Code] (principal law on matters relating tothe organisation and management of companies) (RT I1995, 26/28, 355), 15 February 1995 and as amended.

European Union

There is no generally agreed upon single “corporategovernance code”, as such. The rules to observe arecontained in a number of EU Regulations, Directives,Recommendations, Proposals and ongoing legislativeAction Plans, in conjunction with the laws in the variousEU member countries, corporate governance codes inthe various EU member countries and listing rules of theregulated securities markets in the various EU membercountries. See, for example:

Regulations

2157/2001 (European Company Statute)

1606/2002 (accounting standards for companies,international norms)

1725/2003 (relating to Regulation 1606/2002,accounting standards for companies, internationalnorms). See also Regulation 1751/2005 dated 25October 2005 amending Regulation 1725/2003 adoptingcertain international accounting standards in accordancewith Regulation 1606/2002, as regards IFRS 1, IAS39 and SIC 12 (special purpose entities and sharebased payments)

211/2005 (amending Regulation 1725/2003 andadopting certain international accounting standardsin accordance with Regulation 1606/2002 as regardsInternational Financial Reporting Standards (IFRS) 1


2003/125/EC Disclosure of conflicts of interest andfair presentation of investment recommendations.Implementing Directive 2003/6/EC

2004/25/EC Takeover bids (part of EU Action Planon corporate governance)

2004/72/EC Market Practices Directive

2004/109/EC Transparency requirements in relationto information about issuers with securities admittedto trading on a regulated securities market. AmendingDirective 2001/34/EC

2005/56/EC Cross-border mergers of limitedliability companies

2005/60/EC Third Money Laundering Directive

2006/43/EC Statutory Audit of Annual Accountsand Consolidated Accounts. See also Directive2006/46/EC

2006/68/EC Formation of public limited liabilitycompanies and the maintenance and alteration oftheir capital

2007/14/EC Transparency RequirementsImplementing Directive

Action Plans and Proposals

EU Proposal (5 January 2006): Cross-border shareholdervoting to be made easier (proposal for a Directive tofacilitate the cross-border exercise of shareholders'rights in listed companies) COM (2005) 685Reference: IP/06/10. Date: 10 January 2006

Commission Recommendation 2005/162/EC of15 February 2005 on the role of non-executive orsupervisory directors of listed companies and onthe committees of the (supervisory) board

Global Compliance

86/635/EEC Annual and consolidated accounts(banks and financial institutions). See also Directive89/117/EEC (annual accounting documents ofbranches of some such entities)

89/666/EEC Disclosure requirements for branches ofcertain companies (Eleventh Company Law Directive)

90/605/EEC Company annual and consolidatedaccounts (amending various prior Directives)

92/101/EEC Public limited liability companies(formation and capital)

94/45/EEC European Works Council Directive

2001/34/EC (Directive) Securities ConsolidationDirective (stock exchange listings)

2001/65/EC Company accounts (evaluation rulesand methods)

2001/86/EC European Company Statute(supplements on employee involvement)

2002/87/EC Supervision (credit institutions,insurance and investment firms). Amends Directive73/239/EEC, 93/22/EC and others

2003/6/EC Insider dealing, market manipulation,market abuse

2003/58/EC Disclosure requirements for certaintypes of companies. Amends Directive 68/151/EEC

2003/71/EC Prospectuses (securities offered ortraded to the public). Amends Directive 2001/34/EC

2003/124/EC Disclosure of inside information anddefinition of market manipulation. ImplementingDirective 2003/6/EC


Related item: Fostering An Appropriate Regime ForShareholders’ Rights Consultation Document Of TheServices Of The Internal Market Directorate GeneralDate: 16 September 2004

Company law and corporate governance: Commissionpresents Corporate Governance and Company LawModernisation Action PlanReference: IP/03/716 Date: 21 May 2003

Commission Recommendation 2002/590/EC CommissionRecommendation of 16 May 2002 — Statutory Auditors'Independence in the EU: A Set of Fundamental Principles(notified under document number C(2002) 1873);

Commission Recommendation (2001/256/EC) of 15November 2000 on quality assurance for the statutoryaudit in the European Union: minimum requirements[2001] OJ L 91/91

Commission Recommendation (2001/453/EC) of 30 May2001 on the recognition, measurement and disclosure ofenvironmental issues in the annual accounts and annualreports of companies [2001] OJ L 156/33

Commission Recommendation of 23 June 2000 concerningdisclosure of information on financial instruments andother items complementing the disclosure requiredaccording to Council Directive 86/635/EEC on the annualaccounts and consolidated accounts of banks and otherfinancial institutions (notified under document numberC(2000) 1372) (2000/408/EC)

See, generally, the EU Financial Services Action Plan(ongoing).

See, also, the Euroshareholders Corporate GovernanceGuidelines 2000 and the Euroshareholders guidelineson remuneration (February 2005).

Global Compliance

Commission announces that it will adopt mandatoryexpense based option accounting treatment for options(share-based payments to management and employees)pursuant to IFRS 2, noting that expensing stock optionsin the income statement will impact on reportedcorporate earningsReference: Memo/04/302. Date: 20 December 2004

Commission Recommendation for fostering anappropriate regime for the remuneration of directorsof listed companiesReference: 2004/913/EC.Date: 14 December 2004

Accounts: Commission proposes collective boardresponsibility and more disclosure on transactions,off-balance sheet vehicles and corporate governance(with proposed Directive]Reference: IP/04/1318. Date: 28 October 2004

Corporate governance: Commission creates EuropeanForum to promote convergence in EuropeReference: IP/04/1241. Date: 18 October 2004

Directors’ pay – Commission sets out guidance ondisclosure and shareholder controlReference: IP/04/1183. Date: 6 October 2004

Corporate governance: Commission urges MemberStates to ensure a strong role for independent directorsReference: IP/04/1182. Date: 6 October 2004

European Commission launches broad strategyto prevent financial and corporate malpracticeReference: IP/04/1164. Date: 30 September 2004

Corporate governance: Commission consults onshareholders’ rightsReference: IP/04/1107. Date: 16 September 2004


France

French legal rules about corporate governance arefound in various statutes, codes and recommendations,among which are the "Loi sur les Nouvelles RégulationsÉconomiques" [Law n° 2001-420 of 15 May 2001 on NewEconomic Regulations (notably Sections 106, 107, 110,114 and 116)], the "Loi de Sécurité Financière" [Law n°2003-706 of 1 August 2003 on Financial Security (notablySections 117, 120 and 122)] and the “Ordonnance portantRéforme du Régime des Valeurs Mobilières” [Order n°2004-604 of 24 June 2004 on Reform of the SecuritiesSettlement (notably Sections 51 and 64).

See, also, the “Vade-mecum de l’administrateur” [theDirector’s Vade-mecum] dated 14 January 2005, publishedby the Institut français des administrateurs [FrenchInstitute of Directors] and Report n° 3267 dated 5November 2003 of the legal committee of the AssociationNationale des Sociétés par Actions (“ANSA”) [Frenchnational association of stock companies], which analysesthe impact of Law n° 2003-706 of 1 August 2003 onFinancial Security, on the board of directors, the preparationof annual reports, internal controls and audit procedures.

For listed companies, see, “Principes de gouvernementd'entreprise résultant de la consolidation des rapportsconjoints de l'AFEP et du MEDEF de 1995, 1999 et 2002”[Corporate Governance of Listed Companies: Principles forcorporate governance based on consolidation of the 1995,1999 and 2002 reports of Association Française desEntreprises Privées (“AFEP”) and Mouvement desEntreprises de France (“MEDEF”), dated October 2003:Article 1 (the board of directors and its duty to representthe shareholders collectively), Article 2 (the board ofdirectors and dealings with the market, including thepublication of financial accounts (Article 2.2), off-balancesheet items and risk disclosures (Article 2.3)), Article 3(separation of the functions of chairperson and chiefexecutive officer), Article 5 (shareholder rights, includingduties of the directors in connection with shareholdermeetings), Article 6 (composition of the board of directors

Global Compliance

Finland

Suositus listayhtiöiden hallinnointi- ja ohjausärjestelmistä[Corporate Governance Recommendations for ListedCompanies, published by HEX et al.], December 2003,Recommendations 2.1-2.4 (notices and conduct of thegeneral meetings of shareholders), Recommendations3.5-3.6 (the supervisory board and limitations upon itspowers), Recommendations 4.7-4.20 (the managementboard, including adoption of a written charter for its workand regular evaluation procedures, specific qualificationsof directors (Recommendation 4.15), independence andcriteria for independence (Recommendations 4.17-4.18)),Recommendations 5.21-36 (board committees),Recommendations 5.27-5.30 (audit committee),Recommendations 5.31-33 (nomination committee),Recommendations 5.34-36 (compensation committee),Recommendations 6.37-6.40 (the managing director),Recommendations 8.43-8.48 (compensation, includingshare and share option arrangements and compliance withinsider trading regulations, disclosure of decision-makingprocess and disclosure of termination payments),Recommendations 9.49-9.51 (internal controls, riskmanagement and internal audit), Recommendations 11.53-11.54 (external audit) and Recommendations 12.55.-12.57(communications and disclosures, including websitedisclosures).

See, also, relevant provisions of the Osakeyhtiölaki(Lag om aktiebolag) [Companies Act] (Law 624/2006),in effect from 1 September 2006.

See, also, Listaamattomien Omien Yhtiöiden HallinnoinninKehittäminen (Icke börsnoterade företag uppmuntrastill god förvaltning) [Improving Corporate Governanceof Unlisted Companies] (recommendations of theKeskuskauppakamari (Centralhandelskammaren) [CentralChamber of Commerce of Finland], January 2006.


Germany

The Deutscher Corporate Governance Kodex [GermanCorporate Governance Code (the "Code")] (26 February2002 and as amended through 12 June 2006), sets forththe essential statutory regulations for the managementand supervision (governance) of German listed companies.

Note: Various Recommendations (“Empfehlungen”) pursuant to the Code aremarked in the text by use of the word "shall". Companies may deviate fromthese Recommendations but are then obliged to disclose the details, annually.The Code also contains Suggestions (“Anregungen”) which can be deviatedfrom without disclosure and for this the Code uses terms such as "should" or"can”. The remaining parts of the Code, not marked by these terms, containprovisions that companies are compelled to observe under applicable law.Although the Code is specifically aimed at listed companies, it is recommendedthat non-listed companies also comply with it. Only the German version of theCode is officially binding but there are also convenience translations intoEnglish, French, Italian and Spanish.

Key Code provisions: Article 2 (shareholders and thegeneral meeting of shareholders), including one share onevote (Article 2.1.2), in respect of the general meeting thechairperson should be guided by the fact that an ordinarygeneral meeting of shareholders is to be completed within4 to 6 hours at the most (Article 2.2.4), use of proxies(Article 2.3.3), use of modern communications media,including the Internet (Article 2.3.4); Article 3 (cooperationbetween the supervisory board and the management boardand the specific functions of each), role of employeerepresentatives (Article 3.6), duties in connection withtakeover offers (Article 3.7), D&O insurance to beaccompanied by a suitable deductible (excess) (Article 3.8),mandatory approval of loans to directors and managers andtheir affiliates (Article 3.9); Article 4 (duties, compensationand composition of the management board), with detailsregarding compensation packages (Article 4.2.1-4.2.5),in particular a definition of the total compensation ofmanagement board members and the Recommendationthat monetary compensation elements shall comprisefixed and variable elements (Article 4.2.3) as well as thedisclosure of the total compensation of each member ofthe Management Board by name (Article 4.2.5) and in acompensation report as part of the Corporate GovernanceReport (Article 4.2.5), and regarding conflicts of interest(Article 4.3.1-4.3.5); Article 5 (duties of the supervisoryboard), with details regarding compensation packages

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and independence), Article 7.1 (employee representatives),Article 8 (director independence, including definition atArticle 8.1 and see also Article 6.4), Article 9 (selfevaluation criteria and procedures (Article 9.2-9.3) andthe role of committees, as to which see also Article 13-14),Article 12 (directors’ terms of office), Article 14 (auditcommittee), Articles 15 and 18 (compensation committeeand directors’ compensation), Article 16 (nominationscommittee) and Article 17 (code of ethics for directors).

Similarly, see, “Recommandations sur le Gouvernementd’Entreprise” [Corporate Governance Recommendations]of L'Association Française de la Gestion Financière (“AFG”)[French Asset Management Association], March 2004,including various recommendations regarding the conductof shareholder meetings (Article I.A), disclosures toshareholders (Article I.B), proxies (Article I.C), role of theboard of directors, their independence, committees andremuneration (Articles II.A-C).

Three Reports by the Autorité des Marchés Financiers(“AMF”) [French securities markets regulator] issued on13 January 2005 summarise results from 100 namedcompanies listed in France, regarding internal controls inthe context of corporate governance and describe generalcompliance with the AMF’s corporate governance guidelines(published in January 2004).

See, in addition, “Rapport 2006 de l’AMF sur le Gouvernementd'Entreprise et le Contrôle Interne” (22 janvier 2007) (thirdannual report on corporate governance and internal controlprocedures in listed companies, published 22 January 2007by the AMF) and related “Le dispositif de Contrôle Interne:Cadre de référence” (AMF recommendations on the use ofan “Internal Control Reference Framework” for the internalcontrol systems of listed companies). In January 2007,AFEP and MEDEF jointly published their “Recommandationssur la Rémunération des Dirigeants Mandataires Sociaux deSociétés Cotées” (recommendations regarding thecompensation of directors of listed companies).


acts of persons possessing confidential information, incompliance with EU Directive 89/592/EEC], Articles 1-11(abuse of confidential information).

See, further, Νόµος 2190/1920, Περι Ανώνυµων Εταιρείων[Law No. 2190/1920 On Joint Stock Companies, asamended], especially Article 18 (appointment of boardmembers and their removal by holders of at least 10%of the shares, for fraud or serious misconduct), Article 19(directors’ term of office), Articles 20-21 (board meetingsand the order of business), Article 22 (competence of theboard), Article 22-α (responsibilities of board members,including duty of care and confidentiality), Article 22-β(claims against board members for liability), Article 23(incompatible contracts involving directors and managers =non-competition with the company), Article 23-α (prohibitionof loans to founders and board members), Article 31(shareholders may remove directors), Article 34 (shareholdersmay appoint directors), Articles 36-40-ε (audits andauditors), Articles 41-46-α (books, balance sheets anddistribution of profits), Article 58-α (penalties for violationof Article 23-α, regarding contracts with the company) andArticles 90-109 (accounts and consolidated accounts).

See, also, The Code of Conduct for Companies Listed onthe Athens Stock Exchange and Connected Persons, CMCDecision 5/204/14.11.2000 (14 November 2000) and ΑρχέςΕταιρικής ∆ιακυβέρνησης (Principles of Good CorporateGovernance of the Federation of Greek Industries, 24July 2001).

Hong Kong

Rules Governing the Listing of Securities on the StockExchange of Hong Kong Limited (Main Board), as of 1January 2007 (Appendix 14, Code on CorporateGovernance Practices). See, also, Rules Governing theListing of Securities on the Growth Enterprise Market ofthe Stock Exchange of Hong Kong Limited (“GEM”), Chapter5 (Directors, Secretary and Corporate Governance Matters)and Chapter 7 (Accountants' Reports and Pro FormaFinancial Information), as of 1 January 2007.

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and disclosures of the compensation in the CorporateGovernance Report (Article 5.4.1-5.4.7) and regardingconflicts of interest (Article 5.5.1-5.5.4) and boardcommittees (Article 5.3, audit committee (Article 5.3.2));Article 6 (disclosures and transparency), including noticesregarding shareholder aggregations (Article 6.2), disclosureof insider securities dealings (Article 6.6), publication of afinancial events calendar as part of overall reporting duties(Article 6.7); Article 7 (reporting and audit of financialstatements), including auditor independence (Article 7.2.1)and auditor duty to report irregularities (Article 7.2.3).

See, also, relevant provisions of the Aktiengesetz (AktG)[Stock Corporation Act, as amended], the Verordnung überdie Zulassung von Wertpapieren zum amtlichen Markt aneiner Wertpapierbörse (Börsenzulassungs-Verordnung(BörsZulV)) [Stock Exchange Listing Rules, as amended]and numerous other German rules and regulations relatingto corporate legal matters and securities transactions,including the Kapitalanleger-Musterverfahrensgesetz(KapMuG) [the Act on Model Case Proceedings in Disputesunder Capital Markets Law (Capital Markets Model CaseAct)], in effect since 1 November 2005.

Greece

Νόµος υπ' άρθρο 3016/2002 “Για την εταιρικήδιακυβέρνηση, θέµατα µισθολογίου και άλλες διατάξεις”(ΦΕΚ 110/17.05.2002), όπως τροποποιήθηκε από το άρθρο26 του νόµου 3091/2002 (ΦΕΚ, 330/24.12.2002) [Law3016/2002 (Gov. Gazette 110/17.05.2002): “On corporategovernance, board remuneration and other issues”, asamended by Law 3091 (Gov. Gazette 330/24.12.2002),17 May 2002, Article 2 (responsibilities of the board ofdirectors), Articles 3-4 (composition of the board, includingindependence), Articles 4-5 (remuneration of independentdirectors and limitations upon share ownership), Articles 6-8 (audits and internal controls), Article 10 (penalties). See,also, Laws Nos. 3401/2005, 3340/2005 and 3371/2005 andΠ.∆. 53/1992 Για τις πράξεις προσώπων που είναι κάτοχοιεµπιστευτικών πληροφοριών σε συµµόρφωση προς τηνΟδηγία 89/592/ΕΟΚ [Presidential Decree 53/1992 “On the


Hungary

Felelős Vállalatirányítási Ajánlások – Budapesti ÉrtéktőzsdeZrt. (2004) [Corporate Governance Recommendations -Budapest Stock Exchange Ltd. (2004)], role andresponsibilities of the board of directors (Recommendations1.1.1-1.1.2(k)), role and responsibilities of the supervisoryboard (Recommendations 1.2.1-1.2.2), board of directorsand supervisory board membership (Recommendations1.4.1-1.4.4), independence of board of directors andsupervisory board members (Recommendations 1.5.1-1.5.6, with definitions at 1.5.2 and 1.5.5), compensationof the members of the board of directors, the supervisoryboard and of the executive management (Recommendations1.6.1-1.6.4), systems of internal controls (Recommendations1.7.1-1.7.4, including internal audit processes andprocedures), board committees (Recommendations 1.8.1-1.8.4, audit committee (1.8.2), nomination committee(1.8.3), remuneration committee (1.8.4), external advisors(1.10.1-1.10.2)), succession planning (Recommendation1.9), transparency and disclosure in general (Recommen-dations 2.1.1-2.1.13), shareholders’ rights and treatmentof shareholders (Recommendations 3.1.1-3.1.6, plus anappendix on the conduct of shareholders’ meetings), therole of stakeholders in corporate governance (Recommen-dation 4), all keyed to the relevant Hungarian legislationand stock market rules.

See also “A Budapesti Értéktőzsde Zrt. szabályzata avezető állású személyeire és az alkalmazottaira vonatkozóösszeférhetetlenségi szabályokról” (módosítva: 2003.március 27.) [Regulation of the Budapest Stock ExchangeLtd. on the Rules of Conflict of Interest of Persons inManagement Positions and of Employees] (as amendedthrough 27 March 2003); and see “A Budapesti ÉrtéktőzsdeZrt. Szabályzata a bevezetési és forgalombantartásiszabályokról” (módosítva: 2006. november 2.) [Regulationsof the Budapest Stock Exchange Ltd. for Listing, ContinuedTrading and Disclosure (as amended through 2 November2006)].

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有關《企業管治常規守則》以及《企業管治報告》規則的主板《上市規則》修訂（只有經修訂規則的標記顯示版本）(2004年11月1)(目前只有英文本) [Amendments to the Main Board ListingRules relating to the Code on Corporate GovernancePractices and Rules on the Corporate Governance Report(19 November, 2004)]. Rules relating to corporategovernance (公司管制) for companies listed for trading onthe Hong Kong Stock Exchange are incorporated within theamended Listing Rules and include the following, pursuantto Update No. 82 (= Note dated 8 December 2004), as of 1January 2007: Listing Rules (Main Board), Volume 2,Appendix 5 Form B (declaration and undertaking withregard to directors and their acceptance of the rules),Appendix 14 = Code on Corporate Governance Practices:Principle 1 (the board of directors, including D&O insurance(Principle A.1.9), board composition and independence(Principle A.3), director skills and training (Principle A.5),Principle B (remuneration and disclosure, remunerationcommittee (Principles B.1.1-B.1.5)), Principle C (accountsand audits, internal controls (Principles C.2.1-C.2.5), auditcommittee (Principle C.3.1-C.3.7), Principle E (shareholderrelations and disclosures), Appendix 10 (Model Code forSecurities Transactions by Directors of Listed Issuers),Appendix 16 (disclosure of financial information), Appendix23 (Model Corporate Governance Report, which sets forththe items as to which companies must “comply or explain”).

These should also be read in conjunction with the “Non-statutory Guidelines on Directors’ Duties”, promulgatedby the Companies Registry in January 2004 (revised April2006). See, also, relevant provisions of the Hong KongCompanies Ordinance (Cap. 32) (公司條例), for example,Article 155C and Article 157, and related rules and regulations,including the Hong Kong Stock Exchange Guide onDisclosure of Price-Sensitive Information (July 2002).


There are also numerous laws, regulations and rulesadministered by the Securities & Exchange Board of India(SEBI). See, for example, the SEBI Disclosure and InvestorProtection (“DIP”) Guidelines, 2000 (as amended through18 October 2006).

For further detail, see, the Listing Agreement of theNational Stock Exchange of India and their bookletentitled “FAQs on Corporate Governance” (January 2006),explaining, inter alia, the operation of Clause 49. Listedcompanies may establish a “whistleblower policy” pursuantto Annexure I D (Section 7) of the Listing Agreement.

The Institute of Company Directors of India, CorporateGovernance (Modules of Best Practice), contains a modelcharter for the audit committee, a model whistleblowerpolicy, a model code of ethics for principal executives andsenior financial officers, model policies and guidelinesrelating to human resources, succession planning,diversity in employment, protecting the environment,acceptance of gifts, a model policy on ombudsmen forcompanies, and is keyed to the relevant Clause 49 (“OnCorporate Governance”) of the Listing Agreement.

See, also, Desirable Corporate Governance in India: A Code(April 1998), published by the Confederation of Indian Industry.

Indonesia

Pedoman Umum Good Corporate Governance (KomiteNasional Kebijakan Corporate Governance) [Code forGood Corporate Governance of the Indonesian NationalCommittee on Corporate Governance], revised 11September 2006, Article I (general principles), Article II(transparency, accountability, board of commissioners(“Dewan Komisaris”), including its composition,independence, committees), Article III (codes of conductand corporate values, the board of managing directors(“Direksi”), including its composition, independence,internal controls), Article IV (audit systems, audit committee,internal controls, fiduciary responsibilities) and otherprovisions relating to disclosures (including timelinessand materiality, insider information) and compliancewith laws and diversity policies.

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Iceland

Leidbeiningar um stjórnarhætti fyrirtækja [Guidelineson Corporate Governance (The Iceland Stock Exchange(ICEX), Iceland Chamber of Commerce, Confederationof Icelandic Employers)], 16 March 2004, Article 3(roles and duties of the board of directors, performanceevaluation, independence (with status to be incorporatedinto annual report), Article 3 (committees, includingArticle 3.3.A, audit committee, Article 3.1.B, remunerationcommittee)), with some keyed to specific provisions ofthe Lög um hlutafélög 1995 nr. 2 30. janúar [IcelandicCompany Law 1995 (Law No. 2/1995)], as amendedthrough 1 January 2007, including Article 63-78(respecting the company board of directors, manager(s)and representative committee), Article 79 (directors’remuneration), Article 79a (independent financial audit),Article 80-96 (conduct of shareholders meetings),including amendments in 2006 which allow for electronicshareholders’ meetings, as well as requiring shareholderapproval of a remuneration policy for companies whichare required to have an authorized accountant.

See, also, OECD Principles (2004) (Iceland has been anOECD member since 5 June 1961).

India

Clause 49 (“On Corporate Governance”) of the ListingAgreement for companies whose securities are traded onthe National Stock Exchange of India requires them toadopt specific corporate governance and disclosurestandards: Clause 49(I)(A)(iii) (director independence),Clause 49(I)(B) (non-executive directors’ compensationand disclosures), Clause 49(II) (audit committee), Clause49(IV) (disclosures, including related party transactions,remuneration of directors), Clause 49(V) (CEO/CFOcertification of financial statements), Clause 49(VI) (reporton corporate governance to be included in annual report),Clause 49 (VII) (compliance certificate from independentauditors to be provided annually to the shareholders and tothe Stock Exchange). Compliance with Clause 49 has beenmandatory since 31 December 2005.


Book 2”), November 2002, containing detailed guidelinesregarding the principal duties of directors (Articles 2.1-2.7),with details regarding maintaining proper books of account(Article 2.6), disclosure duties (Article 2.6.7), dutiesregarding shareholders’ meetings (Article 2.6.8),transactions between directors and the company(Article 2.6.9).

A Guide to Transactions Involving Directors, November2003, containing detailed guidance regarding substantialproperty transactions involving directors (Sections 3.1-3.2),prohibitions on directors dealing in options to trade certainshares and debentures (Section 4.0), prohibition of loansand similar transactions involving directors (Sections 5.0-5.8) and auditors’ obligation to report suspected indictableoffenses (Sections 8.1-8.3).

And, see, “Information Book 1” (companies), “InformationBook 3” (company secretaries) and “Information Book 5”(auditors). See, also, The Market Abuse (Directive 2003/6/EC)Regulations 2005 and the Prospectus (Directive 2003/71/EC)Regulations 2005, both in effect since 6 July 2005.

See, also, The Turnbull guidance as an evaluation frameworkfor the purposes of Section 404(a) of the Sarbanes-OxleyAct (The Financial Reporting Council, 16 December 2004).

Israel

ער5 ניירות רשות [Israel Securities Authority]. CorporateGovernance Code תאגידי ממשל קוד – Goshen Committee inconjunction with the Israel Securities Authority (adoptionof Code announced on 17 December 2006): introductoryprovisions (Chapter 1), composition of board and conductof directors (Chapter 2.1), audit committee (Chapter 2.2),authorizations (Chapter 2.3), additional levels of internalcontrol (Chapter 2.4), institutional bodies and proxies(Chapter 2.5), special Securities Commission Court(Chapter 3). In general, the Code’s recommended goodcorporate governance rules adhere to OECD principles andvarious Israeli corporate laws (Companies Law and relatedRegulations; Securities Law 5728-1968 and related Regula-tions), thereby providing a regime that is similar to thosein many European countries.

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There are also relevant provisions in the Company Lawof 1995, the Capital Markets Law of 1995 (for example,Section Four, Article 81-82, on liability for false andmisleading information by public issuers) and relevantprovisions in various related implementing regulations anddecrees, including relevant rules of the Badan PengawasPasar Modal [Capital Market Supervisory Board, akaBAPEPAM], the Jakarta Stock Exchange and the SurabayaStock Exchange.

See, also, various publications of the Forum for CorporateGovernance in Indonesia, including, Peranan DewanKomisaris dan Komite Audit dalam Pelaksanaan CorporateGovernance (Tata Kelola Perusahaan) [Roles of the Boardof Commissioners and the Audit Committee CorporateGovernance] and its Corporate Governance Self AssessmentChecklist (16 July 2001). See, also, for example, Bank ofIndonesia Regulation Number 8/4/Pbi/2006 ConcerningGood Corporate Governance Implementation byCommercial Banks.

Ireland

The Companies Acts 1963 to 2006 include provisionsgoverning directors of Irish incorporated companies and,while they do not set out a corporate governance codeas such, they do regulate transactions entered into by acompany with its directors or connected persons and thedisclosure by a director of interests in the company and incontracts as well as certain procedural matters regardingappointment and removal of directors.

The Listing Rules of the Irish Stock Exchange largelyreplicate the UK Listing Authority (“UKLA”) Listing Rules(‘Purple Book’). Please see summary of the UKLA ListingRules, below, under “United Kingdom”.

See, also, various publications by the Oifig an Stiúrthóraum Fhorfheidhmiú Corporáideach [Office of the Directorof Corporate Enforcement = ODCE]:

ODCE publication Decision Notice D/2002/1: The PrincipalDuties and Powers of Company Directors under theCompanies Acts 1963-2001 (also known as “Information


delle Società Quotate” [Corporate Governance Committee forlisted companies] (edition dated 1 March 2006). Additionalguidelines for preparing corporate governance reports incompliance with the Codice di Autodisciplina have beenpublished by the Associazione fra le società italiane per azioni(“Assonime”) in their Guida alla compilazione della Relazionesulla Corporate Governance [Handbook on CorporateGovernance Reports], February 2004, with detailed guidelinesregarding corporate governance reporting, includingdistribution and delegation of board powers and boardskills and expertise: board membership (Articles 6.2.1 ff.),independence, self-assessment (Articles 6.2.2-6.2.3), boardcommittees (Article 6.2.4, nomination committee (Article6.2.4.1), remuneration committee (Article 6.2.4.2), internalcontrol committee (Article 6.2.4.3)), board and boardcommittee internal processes and procedures, includinghandling of confidential information and regulation of insidertrading (Articles 6.3.1-6.3.2), internal control systems ingeneral (Article 6.3.4), investor relations (Article 6.3.5),conduct of shareholders’ meetings (Article 6.4), board ofauditors (Article 6.5), with useful appendix for selfassessment and compliance.

See, also, La corporate governance nelle società dell'indiceS&P/MIB - Analisi dello stato di adeguamento al Codice diautodisciplina (settembre 2006) (report of the Italian StockExchange dated September 2006 analysing the implementationof the Self Regulation Code).

Finally, corporate governance principles are also found inLegislative Decree no. 231 of 8 June 2001, which covers“liability of entities for administrative violations resulting fromcrimes”. The aforementioned law provides that companies canbe held liable for some serious crimes committed or attemptedin the interest of or to the advantage of the company itself,by members of the management. The criminal and/oradministrative liability of the company is independent of thecriminal responsibility of the individuals who have committedthe crimes and supplements the latter. Companies may berelieved from criminal and/or administrative liability ifthey have adopted and effectively implemented corporategovernance models for organisation, management and controldesigned to prevent crimes, before the crimes are committed.

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See, also, (1) various rules promulgated by the IsraelSecurities Authority for listed companies (external directorson audit committees, independence of audit accountants)and (2) Corporate Governance in Israel: Compatibility tothe OECD Code on Corporate Governance (November 2006)(Report of the Israel Securities Authority).

Note: Sections 273 and 275 of the Companies Law provide that transactionswith a person who has an interest in the company require the approval ofthe Audit Committee, the Board of Directors and the general meeting ofshareholders. The functions of the Audit Committee are defined in Section117 of the Companies Law (see, also, Section 279, regarding transactionsaffected by Sections 273 and 275). Furthermore, Regulation 2 of theSecurities (Transaction between a company and a controlling shareholdertherein) Regulations, 5761-2001, provides that the company must convenea general meeting and publish a transaction report within fourteen days ofthe date of approval of the transaction by the Board of Directors, with respectto transactions covered by Section 275.

Italy

The basic principles of corporate governance are found inItalian company legislation (generally, Sections from 2325to 2497-septies of the Italian Civil Code, amended on 1January 2004). In addition, for Italian listed companies,there is a general regulation, Regolamento dei MercatiOrganizzati e Gestiti da Borsa Italiana S.p.A.(Rules of theRegulated Markets and Managed by Borsa Italiana S.p.a.]adopted by the ordinary shareholders’ meeting of BorsaItaliana S.p.a. held on 21 December 2006 and approvedby CONSOB (the Italian national regulatory agency forcompanies and securities markets) by resolution no. 15786of 27 February 2007, with effect from 2 April 2007, plus aconsolidated Legislative Decree no. 58/1998, Testo Unicodelle disposizioni in materia di intermediazione finanziaria.

With reference to the Regolamento dei Mercati Organizzatie Gestiti da Borsa Italiana S.p.A., see, also, the Instructionsaccompanying the Rules for the Markets Organised andManaged by Borsa Italiana S.p.a., effective as of 2 April2007.

There is also a specific regulation on corporate governance,the Codice di Autodisciplina [Self Regulation Code]prepared by the “Comitato per la Corporate Governance


See, also, Tokyo Stock Exchange Rules on TimelyDisclosure of Corporate Information by Issuer of ListedSecurity (December 2002).

See, also, relevant provisions of the Commercial Code[numerous revised provisions relating to JapaneseCompany Law].

Jordan

Draft Guidelines of Corporate Governance Principles in theAmman Stock Exchange (2006).

See, also, The Securities Law No. (76) for the Year 2002,as well as various rules and regulations of the JordanSecurities Commission, including its detailed Instructionsof Issuance and Registration of Securities (2005) (publishedon page 4595 of the Official Gazette No. 4726 on 1 November2005), with numerous provisions that are relevant to goodcorporate governance and proper disclosure, as well asvarious Directives for Listing Securities on the AmmanStock Exchange for the year 2004, pursuant to the provisionsof Article 72 of the Securities Law No. 76 of 2002.

See, also, relevant provisions of the Companies Law 22of 1997, as amended.

Kenya

Guidelines on Corporate Governance Practices byPublic Listed Companies in Kenya, issued by the CapitalMarkets Authority (Gazette Notice No. 3362, 14 May 2002),pursuant to the Capital Markets Act (Cap. 485A):Article 2.1 (principles of good corporate governancepractices regarding directors, the board and boardcommittees, directors’ remuneration, supply and disclosureof information, board balance, appointments to the board,multiple directorships), Article 2.2 (role of chairman andchief executive), Article 2.3 (shareholders, approval ofmajor decisions by shareholders, annual general meetings),Article 2.4 (accountability and audit, annual reports andaccounts, internal controls, independent auditors,

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Jamaica

Code on Corporate Governance (25 October 2006),promulgated by The Private Sector Organisation of Jamaica(patterned after the UK Combined Code on CorporateGovernance (2003 version)): Part 1, Section 1 (principlesregarding directors, including independence, remuneration,relations with shareholders, internal controls, auditcommittee and auditors), Part I, Section 2 (institutionalinvestors), Part 2, Section 1 (best practices for directors,the chief executive, board balance and independence,board appointments, training, performance evaluation, re-election, liability of non-executive directors, remunerationof directors and executives and disclosures thereof, conductof shareholders’ meetings, accountability and audit).

The Principles (Part 1 of the Code) became effective forannual reporting periods commencing on or after 1 January2007 and the Best Practices (Part 2 of the Code) should becomplied with as soon as practicable thereafter.

See, also, relevant provisions of The Companies Act, 2004,as amended, which introduced numerous changes relevantto corporate governance and to the duties of companydirectors.

Japan

上場会社コーポレート・ガバナンス原則 Principles of CorporateGovernance for Listed Companies (Tokyo Stock Exchange),16 March 2004, Principle 1 (rights of shareholders,including disclosure of shareholdings with disproportionatevoting power), Principle 2 (equitable treatment ofshareholders), Principle 3 (relationships with employeesand other stakeholders), Principle 4 (disclosure andtransparency, including internal controls designed toencourage accurate and prompt disclosure), Principle 5(responsibilities of the board of directors, audit committee,auditors, including effective systems of checks andbalances and self assessment of a “comply or explain”procedure), all in the context of 企業統治 (corporategovernance), 内部監査 (internal audit) and 外部監査(external audit).


II.2.2 and II.4.1-4.5), audit systems (Articles III.1-III.2,audit committees at Articles III.1.1-III.1.1.8), treatmentof stakeholders (Articles IV.1-IV.2) and takeover defensesand other situations involving control, as well asguidelines on disclosures (Articles V.1-V.2).

Various provisions of the Korean Commercial Code, theSecurities & Exchange Act and the Act on External Auditof Joint Stock Companies are among several laws whichare relevant to issues involving good corporate governanceand the duties and responsibilities of company directorsand management.

See, also, An Overview of Korean Securities Market(published by the Korea Stock Exchange, 2004), ChapterVI (corporate disclosures and coverage of “CorporateGovernance in Korea”, including roles of the auditcommittee, roles of outside directors and protection ofminority rights), including data collected by the KoreaCorporation Governance Service and guidelines suchas the Code of Practice for Independent Directorsintroduced by the Committee on Independent Directors(November 2000).

See, OECD Principles (2004) (Korea has been an OECDmember since 12 December 1996).

Latvia

Korporatīvās Pārvaldības Principi Un Ieteikumi To Ieviešanā[Corporate Governance Principles and Recommendations onTheir Implementation] adopted by the Riga Stock Exchangein December 2005 (with effect from 1 January 2006and with enforcement in effect from 1 January 2007),shareholder meetings and ensuring shareholder rights(Principle II, Articles 1-2), management board (Principle II,Articles 3-6, remuneration (Article 5), conflicts of interest(Article 6)), supervisory board (Principle II, Articles 7-10,remuneration (Article 9), conflicts of interest (Article 10)),disclosure and transparency (Principle II, Articles 11-12),internal controls and risk management (Principle II, Article13), remuneration policy in general (Principle II, Article14), independence criteria of supervisory board members(Annex III). The Code is also available in Russian:

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relationship with auditors), Article 2.5.4 (auditors of publiclisted companies), Article 3 (recommended best practices incorporate governance by public listed companies, includingthose relating to the board of directors, remuneration ofthe directors, best practices relating to the rights of theshareholders and relating to the conduct of generalmeetings), Article 3.5 (best practices relating toaccountability and the role of audit committees).

See, also, Principles for Corporate Governance in Kenya(1999) and a Sample Code of Best Practice for CorporateGovernance (October 2002), prepared by the Private SectorInitiative for Corporate Governance, including detailedprovisions regarding authority and duties of shareholders,leadership of the company, role and functions of the board,composition of the board, appointments to the board,directors’ remuneration, disclosures of information bydirectors, supply of information to directors, directors’training and development, audit and disclosure of accounts,scope and duties of auditors, role of audit committee,accountability of directors jointly and severally, rights ofshareholders, responsibilities to other stakeholders, plusvarious Annexes: Code of Ethics (Annex 1), Framework forBoard and Director Evaluation (Annex 2), Summary Dutiesof the Company Secretary (Annex 3) and Board MeetingManagement and Procedures (Annex 4).

See, also, relevant provisions of the Companies Act (Cap.486), as amended, and relevant Rules of the Nairobi StockExchange, as set forth in its Listing Manual, and in therelevant provisions of the Capital Markets (Securities)(Public Offers Listing and Disclosure) Regulations 2002,as amended, including Regulation CO.F.00 on the “Auditcommittee and corporate governance”.

Korea (South)

기기업업지지배배구구조조 모모범범규규준준 Code of Best Practice for CorporateGovernance of the Committee on Independent Directors(revised February 2003), sets forth detailed guidelines and recommendations regarding shareholders’ rights(Articles I.1.-I.3), functions, duties, responsibilities,compensation and evaluation of the board of directors(Articles II.1-II.9, outside directors described at Articles


Lithuania

Vilniaus vertybinių popierių biržoje listinguojamų bendroviųvaldymo kodeksas [Corporate Governance Code forCompanies Listed on the Vilnius Stock Exchange](21 August 2006 and with enforcement in effect from 1January 2007), Principle I (duty of board and managementto act in the best interest of all shareholders), Principle II(guidelines for proper corporate governance framework),Principle III (shareholders’ meetings and election ofthe board, including independent members (definitionof independence at III.3.2)), Principle IV (duties andliabilities of the directors, including audit, nomination andcompensation committees (IV.4.5)), Principle V (workingmethods and procedures of the board of directors,including the conduct of meetings), Principle VI (equitabletreatment of shareholders, including access to companyinformation), Principle VII (avoidance and disclosure ofconflicts of interest and procedures when such instancesarise), Principle VIII (role of stakeholders in corporategovernance), Principle IX (information disclosure andtransparency in general, including guidance regardingpublic disclosure of price sensitive information (IX.9.5))and Principle X (selection of independent auditor), withreferences throughout to applicable provisions ofLithuanian company law.

See, also, relevant provisions of the Vertybinių PopieriųRinkos Įstatymas (Žin., 1996, m. sausio 16 d. Nr. I-1169,Nr. 16-412, Nr. 62) [Securities Market Law of 16 January1996, No. I-1169], as amended and restated (with detailsabout listings and requirements for prospectuses, detaileddefinition of “insider trading” at Article 2(33), variousdisclosure requirements regarding material events (Articles 8 and 15), prohibition of insider trading and marketmanipulation (Articles 9-10), penalties (Articles 60-63)).

And, see, further, the Akcinių Bendrovių Įstatymas (Žin.,2000, Nr. 64-1914, Nr. 113-3614; 2001, Nr. 112-4081;2002, Nr. 43-1607, Nr. 72-3013, Nr. 101-4495, Nr. 124-5628, Nr. VIII-1835) [Companies Act, as amended andrestated), Articles 14-18, 20-30 (rights of shareholders),Articles 19, 37 (management duties), Articles 31-36(supervisory board), Articles 58-59 (audits and companyaccounts), as well as the Listing and Trading Rules of theVilnius Stock Exchange.

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Принципы корпоративного управления и рекомендациипо их внедрению.

See, also, Rīgas Fondu biržas noteikumi "Par finanšuinstrumentu iek�aušanu un tirdzniecību biržas regulētajostirgos" [Riga Stock Exchange Rules on Listing and Tradingof Financial Instruments on the Markets Regulated by theExchange], as amended and restated through 22 December2006, for example, Articles 9.1, 9.3 and 24 (requirementsfor listing and financial reports), Article 21 (disclosureobligations of issuers), Article 23 (abuse of insiderinformation) and others.

See, also, Komerclikums [Commercial Law], as amendedand restated through 1 July 2006 (provisions relating tocompanies).

Lebanon

The Lebanese Code of Corporate Governance was promul -gated by the Lebanese Transparency Association in 2006and, although designed for small business enterprises, itcontains numerous provisions relevant to good corporategovernance for companies in general, patterned after theOECD Principles (April 2004). Article II shareholders’ rights and obligations, including right to timely accurateinformation (Article II.A.4), rights with respect toshareholder meetings (Article II.B.1.-II.B.5.5), protection of minority shareholders in composition of the board ofdirectors (Article II.D)), Article III (board of directors,including its structure and responsibilities, fiduciary duties(Article III.B), remuneration (Article III.D)), Article IV(auditing and related aspects of corporate disclosure andtransparency, including external independent auditors),plus various Appendices (Appendix B = shareholders’ rightto information, Appendix C = rights of shareholders withregard to shareholders’ meetings, Appendix F = board ofdirector committees, including audit committee andcompensation committee, Appendix G = directors’ charterand duties, Appendix H = related party transactions).

See, also, relevant provisions of the Lebanese Code ofCommerce, as well as various publications of the LebaneseTransparency Association.


Macedonia

Kodeks za Korporativno Upravuvawe na AkcionerskiteDruшtva Kotirani na Makedonskata Berza [CorporateGovernance Code for Companies Listed on the MacedonianStock Exchange] (based on the OECD CorporateGovernance Principles), prepared jointly by the MacedonianStock Exchange and the Macedonian Corporate GovernanceAssociation and adopted in June 2006: Principles 1, 8 and10 (responsibility of management for corporate governancecompliance and effectiveness), Principles 2, 4 and 5 (equaltreatment of shareholders), Principle 7 (timely disclosure),Principle 9 (board independence), Principle 11 (role ofinternal legal counsel), Principle 12 (audit, nomination andremuneration committees), Principle 14 (compliance withlaws), Principle 15 (conflicts of interest).

Note: The Dutch Tabaksblat Code is also available in Macedonian translation(“Kodeks za korporativno upravuvawe na Holandija Principi na dobrokorporativno upravuvawe i standardi na dobra praktika”) (9 December 2003).

See, also, Закон за хартии од вредност е усвоен воноември 2005 година (Службен Весник бр.95/05) [Law on Securities, November 2005], subscription prospectus(Article 18), listing of securities (Article 80), annual reports(Article 154), semi-annual and quarterly reports (Article156, Article 157), proxy materials (Article 158), officer and director ownership reports (Articles 165-166), pricemanipulation (Articles 170-171), insider information(Articles 173-175), penalties (Article 233).

See, also, relevant provisions of the Macedonian CompaniesAct, in effect from 8 May 2004, including Article 342-381(management, including directors and supervisory board),Article 382-415 (shareholders’ meetings).

Malaysia

Code on Corporate Governance (20 March 2000), approved by the Malaysian Securities Commission’s FinanceCommittee of Corporate Governance, including bestpractices for directors (Part 2, section AA, §§I-XXIV(remuneration committees at §XXIV)), best practices foraudits and auditors (Part 2, section BB, §§I-VIII (audit

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Luxembourg

Gouvernance d’entreprise: Les dix Principes degouvernance d’entreprise de la Bourse de Luxembourg [TheTen Principles of Corporate Governance of the LuxembourgStock Exchange], April 2006, in effect from 1 January2007, Principle 1 (corporate governance framework),Principle 2 (duties of the board), Principle 3 (composition of the board and the special committees), Principle 4(appointment of directors and executive managers),Principle 5 (conflicts of interest), Principle 6 (evaluation ofthe performance of the board), Principle 7 (managementstructure), Principle 8 (remuneration policy), Principle 9(financial reporting, internal control and risk management),Principle 10 (respect for the rights of its shareholders andestablishing a policy of active communication with them),and Appendix A (definition of control), Appendix B(transparency requirements: Corporate GovernanceCharter), Appendix C (transparency requirements:Corporate Governance Chapter), Appendix D (independence criteria).

See, also, the “Règlement d'ordre intérieur de la Bourse deLuxembourg” [Rules and Regulations of the LuxembourgStock Exchange], as of 29 June 2005 (especially Chapters6, 9, 11, 12 and 13), including the related Loi du 10 juillet2005 relative aux prospectus pour valeurs mobilières [Lawdated 10 July 2005 relating to prospectuses], Règlementgrand-ducal du 3 août 2005 relatif aux prospectus pourvaleurs mobilières [Grand-Ducal Regulation dated 3 August2005 relating to prospectuses] and related CSSF Circulars05/225 and 05/226 dated 16 December 2005 of theCommission de Surveillance du Secteur Financier (“CSSF”)[Commission for the Supervision of the Financial Sector].

See, also, relevant provisions of Luxembourg company law,including Loi du 10 août 1915 concernant les sociétéscommerciales [Law of 10 August 1915 on CommercialCompanies, aka Commercial Companies Act], as amended,and, for example, Code de Commerce [Commercial Code],as amended, Articles 8 and 15 (on business records andaccounts), and Loi du 9 mai 2006 relative aux abus demarché [Law dated 9 May 2006 on Market Abuse] andrelated CSSF Circular 06/257 dated 17 August 2006.


detailed rules regarding Audit Committees) and Rules 9.1-9.49, detailed rules regarding financial reporting). (Byvirtue of Appendix 8.1 of the Listing Rules, the Code ofPrinciples of Good Corporate Governance of the MalteseStock Exchange is incorporated into the Listing Rules in its entirety and applies to all listed companies).

Att dwar il-Prevenzjoni ta' Abbu� fis-Swieq Finanzjarji[Prevention of Financial Markets Abuse Act] (Chapter 476of the Laws of Malta), dated 1 April 2005, plus relatedsubsidiary legislation, Circulars and Legal Notices (includingLN 106 of 2005: Prevention of Financial Markets Abuse(Fair Presentation of Investment Recommendations andDisclosure of Conflicts of Interest) Regulations, 2005). See, definition of “insider” in MFSA Securities Unit Bulletinsdated 10 March 2006 and 4 July 2006.

Code of Principles of Good Corporate Governance of theBor�a ta’ Malta [Maltese Stock Exchange], Principles 1, 5,and 6 (board must lead and control the company, throughappropriate meetings and interaction and regular reviewand evaluation of procedures and controls), Principle 2(skills and diligence required by directors, includingrequirement of independent judgment), Principle 3 (boardmust monitor and evaluate management performance),Principle 4 (board must monitor share dealings byindividual directors and senior management officers),Principles 8-10 (director remuneration and requireddisclosure in annual report to shareholders), Principles 11-13 (board accountability to shareholders and investorrelations).

See, also, relevant provisions of the Att dwar il-Kumpanniji[Companies Act, 1995] (management and administration at Articles 136-150, audits and accounts at Articles 151-191, plus model company regulations [First Schedule],matters to be included in the offering prospectus [SecondSchedule], accounts and accounting rules [Third and FourthSchedules], contents of directors’ reports [Sixth Schedule],penalties [Eleventh Schedule]) (Chapter 386 of the Laws of Malta), in effect 1 January 1996, as variously amendedthrough 2006, plus related subsidiary legislation.

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committees at §§I-V)), relations between the board andthe shareholders (Part 2, section CC), principles and bestpractices for other corporate participants (Part 3, includingshareholder voting, evaluation of corporate governancedisclosures, role of institutional investors, role of externalauditors), detailed explanatory notes (Part 4, “independent”defined at section 4.23, directors’ training described atsections 4.40-4.41, board committees at sections 4.55-4.58, audit committees at sections 4.62 (II)-4.68), all to beread in conjunction with the Malaysian Companies Act1965, as amended, and the Listing Requirements of theBursa Malaysia Berhad [Malaysia Berhad Stock Exchange],plus its guidelines on Best Practices in Corporate Disclosure(July 2004) and the Statement on Internal Control:Guidance for Directors of Public Listed Companies(December 2000), published by The Institute of InternalAuditors Malaysia.

Note: Various requirements involving corporate governance practices, includingcorporate financial disclosure, directors’ duties and liabilities and shareholderrights have been included within Malaysian company legislation and morebroadly, in the common law (for example, the one-share-one-vote concept andrequirements governing the duties and responsibilities of directors, includingtheir duties regarding financial statements). The Companies Commission ofMalaysia established the Corporate Law Reform Committee in August 2003 topromote corporate law reform, including a comprehensive review of corporatelaw in Malaysia. See, Report entitled “Strategic Framework for the Corporate LawReform Programme of Companies Commission of Malaysia” (11 August 2004).

Malta

Malta Financial Services Authority Listing Rules, asamended through 9 March 2007, Rules 2.9-2.11 and 3.15(skills and disclosures required of directors), Rule 3.16(directors to be free of conflicts of interest), Rules 3.5-3.7(annual accounts of listed companies), Rule 3.37 (directorsto disclose personal interest in company securitiestransactions -- definition of “Connected Person”, withreference to directors, in Definitions, and see also Rule8.32), Rules 5.1-6.9 (contents of prospectus and Appendix6.1), Appendix 8.3 (model articles of association, Section1.2 (a director should not vote on a matter in which thedirector has a material personal interest, Rules 8.48-8.60,


года) [Law No. 1134-XIII On Joint Stock Companies(Official Gazette No.38-39 dated 12 June 1997)], asamended, contains provisions relevant to corporategovernance: Article 7 (managing bodies of a company,including the general meeting of the shareholders, theboard of directors or supervisory council, the executivebody and the auditing committee or auditor), Article 69-70(executive body and auditing committee of a company),Article 71-72 (audit committee), Article 73-74 (officers of acompany and their responsibilities), Article 85-86 (conflictsof interest), Article 87-92 (bookkeeping, reporting, auditcontrols and disclosure of information).

See, also, relevant provisions of the Legea cu privire lapiata valorilor mobiliare Nr.199-XIV, 18.11.98 [SecuritiesMarket Act] (in effect since 1999) and other laws and rulesadministered by the Comisia Nationala a Valorilor Mobiliare[Moldovan National Securities Commission], which has alsoprepared a draft Code of Corporate Governance.

Mongolia

Компанийн Тухай (Улаанбаатар хот, 1999 оны 7 дугаарсарын 2-ны єдєр; 2000 оны 5 дугаар сарын 12-ныєдрийн хуулийн єєрчлєлтийг тусгав) [Mongolian CompanyLaw of 1999, as amended], Article 31-46 (Компанийн хувьнийлvvлсэн хєрєнгє, компанийн хувьцаа, бусад vнэтцаас) [owners’ equity, shares and other securities), Article60-80 (Компанийн удирдлага) [company management,including shareholders’ meetings (Article 60-74), the boardof directors (Article 75-79), the executive body (Article80)], Article 81-83 (Компанийн эрх бvхий албантушаалтны хvлээх хариуцлага) [liabilities of governingpersons of a company, including directors, executive body,chief financial officer and general accountant, includingshareholders’ legal remedies (Article 83)], Article 86-90(Сонирхлын зєрчилтэй хэлцэл) [conflict of interesttransactions], Article 91-97 (Компанийн санхvv, эдийнзасгийн vйл ажиллагаанд тавих хяналт [financial matters,including audits, financial reports, economic control andsupervision, corporate supervisory board (Article 92) anddocument retention (Article 95), definition of affiliatedperson (Article 97)].

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Mexico

Código de Mejores Prácticas Corporativas (“Código MPC”)(2006) (adopted by various organisations, including theMexican Stock Exchange, the Mexican Bankers' Association,the Mexican Institute of Public Accountants and the ConsejoCoordinator Empresarial), Chapter I (general principles), Chapter II (corporate governance), Chapter III (treatmentof shareholders and conduct of shareholders’ meetings),Chapter IV (board of directors, including, composition andresponsibilities, Article IV-1-IV.5), Chapter V (audits andauditors, including internal controls, Article V.4 and relatedparty transactions, Article V.6), Chapter VI (remunerationand remuneration policies), Chapter VII (planning andfinancial matters), including numerous related guidelinesand recommendations.

See, also, OECD Principles (2004) (Mexico has been anOECD member since 18 May 1994 and the Código MPC is modeled, in part, upon the OECD Principles).

A new Mexican Securities Market Law (Ley del Mercadode Valores) was approved on 6 December 2005 by theHouse of Representatives (Cámara de Diputados) ofMexico and on 8 December 2005 by the Senate (Senado)(published in the Official Gazette on 30 December 2005)and enacts numerous provisions affecting the corporategovernance of listed companies, including mattersinvolving disclosure of information, audit committees,non-competition clauses, board independence andpenalties. There are also numerous relevant rules,regulations and circulars of the Mexican Stock Exchange,including its Reglamento Interior [Internal Regulation],dated 5 March 2007, as well as rules contained in theMexican Commercial Code.

Moldova

Privind societatile pe actiuni (Lege a ParlamentuluiRepublicii Moldova N 1134-XIII, 2 aprilie 1997, MonitorulOficial N 38-39, 12 iunie 1997) (Закон Республики Молдова(Об Акционерных Обществах) N 1134-XIII от 2 апреля1997 года, Monitorul Oficial N 38-39 от 12 июня 1997


compensation committee (II.2.9-II.2.14)), Principles II.3and III.6 (conflicts of interest, including examples, approvalprocedures and criteria (II.3.1-II.3.4, III.6.1- III.6.7)),Principle III (role and duties of the supervisory board anddisclosures regarding their skills and training), PrincipleIII.2 (independence of the supervisory board members,with definition (III.2.2)), Principle III.3 (expertise andcomposition of the supervisory board members), PrincipleIII.4 (roles of the chairman of the supervisory board andcompany secretary), Principle III.5 (composition and rolesof audit committee (III.5.4- III.5.9), remunerationcommittee (III.5.10-III.5.12) and nomination committee(III.5.13)), Principle III.7 (remuneration of supervisoryboard members), Principle IV (fair treatment ofshareholders and conduct of shareholders’ meetings,including treatment of takeover bids (IV.1.3), dividendpolicy (IV.1.4), dealings with analysts (IV.3.1-IV.3.5)) andPrinciple V (audits, independent external auditor (V.2.1-V.2.3), internal audits (V.3.1) and financial reportingobligations)).

See, also, Handboek corporate governance SCGOP(Stichting Corporate Governance Onderzoek voorPensioenfondsen) [Corporate Governance Manualprepared by the Dutch Corporate GovernanceResearch Foundation for Pension Funds] (2004).

See, also, relevant provisions of the Burgerlijk Wetboek[Civil Code], Boek 2 [Book 2], containing the main statutoryprovisions relating to companies, Articles 64-174a (privatelimited companies, defined at Article 66(2)), Articles 175-274 (public limited companies, defined at Article 177(2)),and, more specifically, minimum capital (Articles 67a, 178-178c), shareholders’ meetings (Articles 107-128, 217-238),board of management (Articles 129-164, 239-261),supervisory board (Articles 152-164 (large NVs), 262-274(BVs)), disqualification of directors (Articles 160, 270),dismissal of directors (Articles 134, 244), remuneration(Articles 135, 245, and disclosure of remuneration andother benefits in annual accounts, Articles 383c-e), specialrules for “structuurvennootschappen” (Article 263) andaccounting regulations, including those relating to annualaccounts and reports (Articles 360-446).

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Morocco

Loi n° 17-95 relative aux sociétés anonymes [CompanyLaw of 1995], as amended, contains various provisionsrelevant to corporate governance, including Article 39-68(“managing organs” of the company, including theshareholders, directors and auditors), Article 69-76(specific duties and responsibilities of the board of directorsand directors), Article 77-106 (further provisions relating tomanagement and the supervisory council), Article 107-139(shareholders and shareholders’ meetings), Article 153-156(disclosure duties of listed companies), Article 157-158(shareholder legal remedies), Article 159-181 (audit,auditors and internal controls), Article 316-336 (financialstatements, accounts, dividends).

See, also, relevant rules and regulations of the CasablancaStock Exchange and of the Conseil Déontologique desValeurs Mobilières [Moroccan Securities Trading Authority],including Dahir portant loi N°1-93-211 du 21 septembre1993 relatif à la bourse des valeurs modifié et complété par les lois N° 34-96, 29-00, 52-01 [Listing and TradingRequirements], as amended and supplemented bynumerous decrees and regulatory Circulars.

Netherlands

De Nederlandse corporate governance code Beginselen van deugdelijk ondernemingsbestuur en best practicebepalingen [Dutch corporate governance code principles of good corporate governance and best practicesprovisions], 9 December 2003 = “Tabaksblat Code”,Principle I (adoption and implementation of code), Principle II.1 (management board and its duties andprocedures, including term of service (II.1.1), internalcontrols (II.1.3-II.1.4), internal reporting of possibleirregularities (II.1.6), limitation on outside boardmemberships (II.1.7)), Principle II.2 (remuneration,including detailed provisions regarding share options(II.2.1-II.2.5), management dealings in company securities (II.2.6), severance compensation (II.2.7), policy regarding management loans and credits (II.2.8),elements of compensation, disclosure and role of the


5 (board composition and evaluation), Article 6(transparency, data integrity, disclosure requirements),Article 7 (risk management), Article 8 (role of the internaland external auditors).

See, also, relevant provisions of the Nigerian Companiesand Allied Matters Act, 1990, as amended, for example,Article 244-280 (including duties of directors, theirremuneration and disclosure of their personal businessinterests), Article 331-358 (financial statements and audit,directors’ reports) and the rules and regulations of theNigeria Securities & Exchange Commission.

Norway

Norsk anbefaling – Eierstyring og selskapsledelse[Norwegian Code of Practice for Corporate Governance],28 November 2006, Article 1 (implementation of the Codeof Practice), Article 2 (conduct of the business), Article 3(equity and dividends), Article 4 (equal treatment ofshareholders and transactions with close associates),Article 5 (freely negotiable shares), Article 6 (generalmeetings of shareholders), Article 7 (nominationcommittee), Article 8 (corporate assembly and board ofdirectors: composition and independence), Article 9 (thework of the board of directors, including the auditcommittee), Article 10 (risk management and internalcontrol), Article 11 (remuneration of the board ofdirectors), Article 12 (remuneration of the executivemanagement, including disclosure in annual report), Article13 (information and communications, including investorrelations), Article 14 (conduct of directors in takeoversituations), Article 15 (audits and auditors), keyed tospecific provisions of applicable Norwegian legislation.

See, also, various relevant provisions of the Lov omallmennaksjeselskaper (allmennaksjeloven) (relating topublic limited liability companies (ASA)) and the Rules andRegulations of the Kredittilsynet (Financial SupervisoryAuthority = Norwegian Banking, Insurance and SecuritiesCommission) and of the Børsforskriften (Rules of the OsloStock Exchange).

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New Zealand

Corporate Governance in New Zealand: Principles andGuidelines (Securities Commission of New Zealand),16 February 2004 (plus related Handbook for Directors,Executives, and Advisers, 5 April 2004), Principle 1(ethical standards and guidelines), Principle 2 (boardcomposition and evaluation of performance, includingindependence requirements), Principle 3 (boardcommittees), Principle 4 (reporting and disclosure),Principle 5 (director and officer remuneration), Principle6 (risk management), Principle 7 (auditors), Principle 8(shareholder relations).

See, also, the updated and restated Listing Rules of theNew Zealand Stock Exchange (NZAX Listing Rules) (ineffect from 1 March 2007), including as Part B, Section 2,thereof, detailed provisions regarding corporategovernance, including Article 2.1.2 (nomination ofdirectors), Article 2.2 (proceedings and powers ofdirectors), Article 2.2.3 (conflict of interest and “interested”directors, within the meaning of Section 139 of theCompanies Act, 1993), Article 2.3 (director remuneration)and Part B, Section 4, Article 4 (transactions with relatedparties) and various provisions regarding continuous dutiesto disclose material information (Part B, Section 1), allpursuant to the Summary and Initial Exposure Draft ofRestated NZAX Listing Rules (29 November 2006).

Nigeria

The Code of Corporate Governance for Banks waspromulgated by the Central Bank of Nigeria (effective 3 April 2006) and is mandatory upon banks. It containsnumerous provisions relevant to good corporate governancefor companies in general. Article 4.2 (duties of the board ofdirectors), Article 4.3 (need for effective managementteam), Article 4.5 (board meetings), Article 4.10 (balancebetween executive and non-executive directors), Article4.11 (succession planning), Article 4.15 (audit committee),Article 4.16 (external audit), Article 4.17 (code of conduct),Article 4.18 (management reporting and disclosure), Article


Pakistan

Code of Corporate Governance (Securities and ExchangeCommission of Pakistan), 28 March 2002, covers relevantissues under various unnumbered captions (board ofdirectors, qualification and eligibility to act as a director,responsibilities, powers and functions of the board ofdirectors, significant issues to be decided by the boardof directors, CFO and company secretary, corporate andfinancial reporting framework, audit committee, internalaudit, external auditors).

See, also, the Directors and Secretaries Guide (publishedby the Securities and Exchange Commission of Pakistan, in its SEC Guide Series). In addition, there are numerousrelevant laws, regulations, notifications and circulars, forexample, the Commission’s Circular No. 23/2005 (14December 2005) “Compliance of International Standard on Auditing 720- Other Information in the DocumentsContaining Audited Financial Statements” and Circular03/2006 (10 February 2006) “On Holding of Election ofDirectors”. See, more generally, the Pakistan CompaniesOrdinance, 1984, as amended.

Panama

Corporate governance principles for listed companies arecontained in the Acuerdo No. 12-2003 de 11 de Noviembrede 2003 “Por el cual se recomiendan guías y principios de buen gobierno corporativo por parte de sociedadesregistradas en la Comisión Nacional de Valores” y semodifican los Acuerdos 6-2000 de 19 de mayo de 2000 y18-2000 de 11 de octubre de 2000 [Republic Of PanamaNational Securities Commission Agreement No. 12-2003 (of 11 November 2003) “Whereby the National SecuritiesCommission issues recommendations on guidelines andprinciples of corporate governance for registered issuers”and Agreements 6-2000 of 19 May 2000 and 18-2000 of 11October 2000 are amended: Article 1 (general provisions),Article 2 (definitions, including audit committee, independentdirector, control mechanisms), Article 4 (scope of corporategovernance rules and procedures), Article 5 (transparency

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OECD

Organisation for Economic Co-operation and Development:OECD Principles of Corporate Governance (April 2004),Principle I (general outline of corporate governance goalsand framework), Principle II (general protection ofshareholder rights, including Annotations II.A-C (voting,election and removal of directors, access to information,sharing in profits, certain disclosures by institutionalinvestors)), Principle III (equitable treatment ofshareholders, including availability of legal redress,including Annotations III.A-C (equal rights, protection ofminority shareholders from abuse, prohibition of abusiveinsider trading, disclosure of personal interests bymanagement)), Principle IV (protection of stakeholders,creditors and employees, including Annotation IV.E,avenues for bona fide reporting of suspected corporatewrongdoing and protection of those who communicate theirconcerns), Principle V (disclosure and transparency,including Annotations V.A-D (proper and timely disclosureof financial matters, aggregations of major shareholdings,related party transactions, annual independent audits)),Principle VI (general responsibilities of the board ofdirectors, including Annotations VI.A-E (duty of care and good faith, objective duty of at least a majority ofindependent directors to manage, monitor and guide,including the monitoring of management compensation, of the company’s financial accounting and of managementconflicts of interest).

Note: The Principles are available in the following languages: Arabic,Azerbaijani, French, English, German, Italian, Japanese, Polish, Portuguese,Russian, Serbian and Spanish.

See, further: Technical Committee of the InternationalOrganization of Securities Commissions ("IOSCO", inconsultation with the OECD), Board Independence of Listed Companies Final Report (March 2007) and FinalCommuniqué of the 32nd Annual IOSCO Conference (12 April 2007).


Philippines

Code of Corporate Governance (adopted by the PhilippinesSecurities and Exchange Commission, pursuant to SECCircular Memorandum No. 2), applicable to publicly tradedcompanies, 5 April 2002, Article I (definitions, including“independent director” and “chief audit executive”), ArticleII (governance by the board and director qualifications,including specific duties of individual directors (ArticleII.6.c) and internal control responsibilities of the board(Article II.6.d), Article IV (accountability and audit), ArticleV (shareholder rights and protection of minority interests)and Article VII (disclosure and transparency).

See, also, Model Manual on Corporate Governance(Philippines Securities and Exchange Commission), provides details of suggested systems and complianceprocedures for directors and other officers, including theaudit committee, training processes and monitoring andself assessment. Issuers whose securities are traded on the Philippines Stock Exchange are required to certifycompliance with the Manual on SEC Form 17-C.

See, further, the Code of Proper Practices for Directors (30March 2000), issued by the Philippine Institute of CorporateDirectors and, more generally, the specific provisions of theBatas Pambansa Blg. 68 [Corporation Code of the Philippines,Official Gazette, 21 July 1980, as amended] which relate to the duties and responsibilities of corporate directors,including Title III, Section 23-35 (including conflicts ofinterest, remuneration and committees), Title VIII, Section 74-75 (corporate books and records).

Poland

Kodeks Nadzoru Korporacyjnego (“Kodeks Gdański”),przygotowany w ramach prac Polskiego Forum CorporateGovernance [Corporate Governance Code for Polish ListedCompanies (the “Gdańsk Code”), promulgated by the PolishCorporate Governance Institute], June 2002: Principle I (the main objective of the company is to operate in thecommon interest of shareholders and create value) andrelated Recommendations 1 (disclosure of company’s

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and disclosure), Article 6 (the board of directors and theshareholders), Article 8 (board integration and independencecriteria), Article 10-17 (support committees, auditcommittee, compliance and risk administration committee,nomination committee for independent directors and keyexecutives), Article 18 (rules of ethics), Article 20-24(various disclosure and reporting situations, includingreference to relevant reporting forms IN-A, RV-1 and RV-2).

See, also, related legal Opinion No. 11-2004 of the PanamaNational Securities Commission, dated 2 August 2004 andits various internal Rules and Regulations.

Peru

Principios de Buen Gobierno para las Sociedades Peruanas[Principles of Good Governance for Peruvian Companies],July 2002: Article I (shareholders’ rights), Article II (equaltreatment of shareholders), Article III (role of stakeholdersin corporate governance), Article IV (disclosure andtransparency), Article V (responsibilities of the board of directors).

See, also, numerous rules, directives and guidelinespublished by CONASEV (Comisión Nacional Supervisora de Empresas y Valores) [Peruvian National SecuritiesCommission], including its Manual para la Preparación de Información Financiera [Manual for the Preparation of Financial Information].

See, also, the related CONASEV Información sobre elcumplimiento de los Principios de Buen Gobierno para las Sociedades Peruanas, 28 December 2005, relating tocompliance with the Principles of Good Governance, underGovernment Resolution (Resolución Gerencia General) Nº140-2005-EF/94.11, dated 28 December 2005.

There are also relevant provisions within the Ley Generalde Sociedades [Peruvian Company Law], for example,Article 111-151 (calling and conduct of shareholders’meetings), Article 152-197 (directors, management and responsibilities).


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objectives), 2 (adherence to the declared objectives) and 3 (operating with proper respect for the company, its participants and its social environment); Principle II(composition of the supervisory board should facilitateobjective oversight of the company and reflect interests ofminority shareholders) and related Recommendations 1-2(independence of the supervisory board), 3-4 (election,dismissal and information about the candidates for thesupervisory board) and 5 (right of the shareholders holdingat least 20% of shares to elect their representative bycumulative voting); Principle III (powers of the supervisoryboard and requirement that the company by-laws shouldensure effective supervisory board processes and safeguardthe interests of all shareholders) and related Recommen -dations 1-2 (approval of transactions with related partiesand strict observance of the company by-laws), 3(administrative and consultancy support for the supervisoryboard) and 4-5 (disclosure of conflicts of interest andprohibition of insider trading); Principle IV (the shareholders’meeting to be conducted so as not to violate interests and rights of any shareholders, e. g., the controllingshareholder(s) should not restrict the other shareholders inthe effective exercise of their corporate rights) and relatedRecommendations 1-2 (rules for the general shareholders’meeting), 3 (right of the supervisory board to convokeextraordinary general meeting) and 4-6 (equitable andequal treatment of shareholders during the shareholders’meeting, protection of minorities, by-law amendments torequire supermajority vote of 90%); Principle V (thecompany should not apply anti-takeover defenses againstshareholders’ interests and changes in the company sharecapital should not violate interests of the existing shareholders)and related Recommendations 1-4 (prohibition againstabuse of anti-takeover defenses) and 5 (directors’ andmanagement shares and options not to exceed 10% ofissued securities, price not to differ significantly from themarket prices); Principle VI (the company should provideeffective access to information, which is necessary toevaluate the company’s current position and furtherprospects, as well as the way in which the companyoperates and applies the corporate governance rules) andrelated Recommendations 1, 4 and 5 (disclosure and accessto information, including uses of the company website), 2-3(annual corporate governance reporting) and 6 (disclosureof information regarding ownership and control structures);

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Principle VII (the appointment process of the company’sauditor should ensure independence of the auditor’sopinion) and related Recommendations 1-3 (selectionprocess and assessment of the auditor) and 4-5 (auditorrotation not to coincide with replacement of themanagement board, plus rules concerning specialassignment auditor).

Further explanations are to be found in the detailed“Komentarz do Kodeksu nadzoru korporacyjnego”[Commentary to the Corporate Governance Code].

See, also, Regulamin Giełdy Papierów Wartościowych wWarszawie S.A. [Rules of the Warsaw Stock Exchange], as at 21 December 2006, and Dobre Praktyki w SpółkachPublicznych 2005 opracowane przez Komitet DobrychPraktyk Forum – Corporate Governance [Best Practices inPublic Companies for 2005, Report to the Warsaw StockExchange by the Best Practices Committee of the CorporateGovernance Forum, at website of Warsaw Stock Exchange],promulgated on 29 October 2004. At the said website, seethe draft declaration on complying with the corporategovernance principles adopted by the Warsaw StockExchange (Oświadczenie w zakresie przestrzegania zasadładu korporacyjnego) and the statements of listedcompanies: Articles 1-17 (best practices for shareholders’meetings), Articles 18-31 (best practices for supervisoryboards, including audit and remuneration committees(Article 28)), Articles 32-40 (best practices for managementboards), Articles 41-48 (best practices in relation to third parties).

The rules for 2005 amend the following, prepared in 2002“Dobre praktyki w spółkach publicznych w 2002” [BestPractices in Public Companies in 2002] at the website of theWarsaw Stock Exchange, as accepted by the WSE SupervisoryBoard and Management Board on 4 September 2002.

Portugal

Recomendações da CMVM sobre o Governo dasSociedades Cotadas [Recommendations of the Comissãodo Mercado de Valores Mobiliários] (CMVM = Portuguesestock exchange commission), November 2003,

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Recommendations 1 and 2 (disclosure of information,including information for shareholder meetings andaccessibility via the company’s website), Recommendations3 and 4 (exercise of shareholder voting rights whether inperson or by proxy), Recommendations 5 and 6 (internalcontrols, including controls over directors’ diligence,loyalty and conflicts of interest), Recommendations 8-9(composition of the board of directors, independence,internal control committees), Recommendation 12(remuneration).

Regulamento da CMVM n.º 7/2001, Governo dasSociedades Cotadas [CMVM Regulation 7/2001] (basicrecommendations along the lines of “comply or explain”),Regulation 1(d) (remuneration of directors to bedisclosed), Regulation 3(1) (acquisition and disposalof shares by directors and affiliates) and Annex (formof model corporate governance report, calling fordetailed data regarding failure to comply with the CMVM’sRecommendations (above), organograms showing variousareas of duties and responsibilities, disclosure andanalysis of share option plans, support rendered toshareholders regarding exercise of their voting rights,description of the effectiveness of the company’sinternal control structures and procedures.

See, also, relevant provisions of the Código das SociedadesComerciais [Companies Code], as amended, and inparticular the amendments embodied in Decreto-Lei n.º 76-A/2006 [Decree-Law no. 76-A/2006, Official Journal 29 March 2006]. Among other things, the amendmentsinvolved numerous changes in the area of corporategovernance rules applicable to Portuguese public limitedcompanies, particularly in the areas of the duty of care andthe duty of loyalty of directors and their accountability fortheir conduct. The amended law also simplified certainprocedures relating to the registration and maintenance of official corporate documents and procedures relating to corporate mergers and demergers.

See, also, the Livro Branco sobre Corporate Governance em Portugal [White Book on Corporate Governance inPortugal], promulgated by the Instituto Português de

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Corporate Governance [Portuguese Corporate GovernanceInstitute] (February 2006), containing a detailed historyand analysis of corporate governance in Portugal, togetherwith various recommendations regarding good corporategovernance practices for non-listed companies.

Romania

Principii de Guvernanţă Corporativă [Corporate GovernanceCode] (adopted by various business organisations) 24March 2000, Article 2 (definitions), Articles 4, 9 and 15(board structure, functions and size), Article 5 (criteria forboard membership), Article 13 (board meetings), Article15.3 (code of ethics), Article 16 (role of the executiveofficers), Article 18 (remuneration), Article 19.2-19.4(reports to shareholders), Article 20 (working reports fromthe executive officers to the board), Article 25-26 (auditsand auditors).

See, also, Corporate Governance Code of the BucharestStock Exchange, pursuant to its listing Regulation Number3 and relevant provisions of the Legea nr. 31 din 16noiembrie 1990 privind societatile comerciale [CompanyLaw 31/1990, as amended], including Articles 128, 134 and 140 (directors, council of administration).

See also, the Laws, Rules and Regulations of the ComisiaNaţională a Valorilor Mobiliare (CNVM) [Romanian NationalSecurities Commission], including (1) Legea nr. 297/2004privind piaţa de capital [Law no.297/2004 regarding theCapital Market], as amended by Law no. 208/2005, and (2) CNVM Regulation no. 2006/1 “privind emitenţii şioperaţiunile cu valori mobiliare” [“On Issuers andOperations with Securities”] (requiring notification ofsecurities transactions by insiders (Article 150) andnumerous other disclosure and compliance duties).

See, also, the "Standardelor de Audit Intern" and "NormeleProfesionale ale Auditului Intern" (Camera AuditorilorFinanciari din Romania) [Audit and Internal Audit Rules of the Romanian Association of Financial Auditors].

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Russia

Кодекс корпоративного Поведения [Russian Code of Corporate Conduct], of the Федеральная служба пофинансовым рынкам [Federal Financial Markets Service], 2 April 2002, Chapter 1, Article 1-7 (general corporategovernance principles, including equitable treatment ofshareholders, accountability of the board of directors, specifictasks of directors and standards), Chapter 2, Article 1-2(shareholder meetings, information available, meetingprocedures), Chapter 3, Article 1-4 (board of directors,composition and election, specific functions and duties, role in connection with management compensation, definitionof “independent” (Article 2.2.2), abuse of confidentialand insider information (Article 3.3), nature and contentof agenda (Article 4.4), board committees (Article 4.7),including an audit committee (Article 4.9), remunerationcommittee (Article 4.10), corporate conflicts committee(Article 4.11) and strategic planning committee (Article4.8), Article 5 (remuneration of directors), Article 6(liability of directors)), Chapter 4, Article 1-6 (executivebodies and managerial boards), Chapter 5, Article 1-2(functions of the corporate secretary), Chapter 6, Article 1-4(major corporate actions, including takeovers, mergers,reorganisations, liquidation), Chapter 7, Article 1-4 (publicdisclosure of company information, including standards ofmateriality (Article 2.3), use of insider and confidentialinformation (Article 4)), Chapter 8, Article 1-4 (financial andother internal controls, audit committee functions andcomposition (Article 1.3-1.4 and 3), advance review of “non-standard” operations (Article 2.2), audits (Article 4)), Chapter9, Article 1-3 (dividends and dividend policies) and Chapter10, Article 1-3 (resolution of corporate conflicts)).

See, also, relevant provisions of the Федеральный закон обакционерных обществах (N 208-ФЗ от 26 декабря 1995года) [Russian Federal Law on Joint Stock Companies, 26December 1995], as variously amended through 21 March2002, Article 47-63 (powers and meetings of shareholders),Article 64-68 (council of directors or supervisory council),Article 70 (collegial executive organ), Article 71 (respon -sibilities of the directors, councils and executive organs),Article 81-84 (transactions in which a director has a personalinterest), Article 85-93 (internal audits, bookkeeping, financialstatements and records).

Global Compliance

Serbia

OECD Principi Korporativnog Upravljanja = Serbian version of Organisation for Economic Co-operation andDevelopment: OECD Principles of Corporate Governance(April 2004), Principle I (general outline of corporategovernance goals and framework), Principle II (generalprotection of shareholder rights, including Annotations II.A-C (voting, election and removal of directors, access to information, sharing in profits, certain disclosures byinstitutional investors)), Principle III (equitable treatmentof shareholders, including availability of legal redress,including Annotations III.A-C (equal rights, protection ofminority shareholders from abuse, prohibition of abusiveinsider trading, disclosure of personal interests bymanagement)), Principle IV (protection of stakeholders,creditors and employees, including Annotation IV.E,avenues for bona fide reporting of suspected corporatewrongdoing and protection of those who communicate their concerns), Principle V (disclosure and transparency,including Annotations V.A-D (proper and timely disclosureof financial matters, aggregations of major shareholdings,related party transactions, annual independent audits)),Principle VI (general responsibilities of the board ofdirectors, including Annotations VI.A-E (duty of care and good faith, objective duty of at least a majority ofindependent directors to manage, monitor and guide,including the monitoring of management compensation, of the company’s financial accounting and of managementconflicts of interest).

See, also, various relevant provisions of the Закон опривредним друштвима (Службени гласник РС, бр.125/04) [Serbian Commercial Companies Law (OfficialGazette of Republic of Serbia, No. 125/04)], relating tojoint stock companies, including Article 275-306 (conductof shareholder meetings), Article 307-328 (board ofdirectors and management body), Article 318 (adoption of corporate governance guidelines), Article 329-333(supervisory board, audit and audit committee).

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Singapore

Code of Corporate Governance (Council on CorporateDisclosure and Governance (CCDG) (14 July 2005),Principle 1 (directors’ duties and skills, including ongoingtraining in law and risk management procedures), Principle 2 (composition of the board of directors, includingindependence (defined at Guideline 2.1, with examples)),Principle 3 (role of the chairperson and chief executiveofficer), Principle 4 (criteria for board membership andappointment), Principle 5 (self-evaluation by the board of itself and of each individual director, including variousbenchmarks and metrics (Principle 5.2)), Principle 6(director access to company information), Principles 7-9(remuneration, types and amounts and role of theindependent remuneration committee (Guidelines 7.1-7.2),guidelines regarding equity compensation (Principle 8.5)and disclosure of details to the shareholders (Guidelines 9-1-9.4)), Principles 10 and 11 (accounts and audits, includingdetails regarding the audit committee (Guidelines 11.1-11.7)), Principle 12 (internal controls), Principle 13 (internalaudits) and Principles 14-15 (fair treatment and communic -ations with shareholders and various related Guidelines).

Listed companies should disclose their corporate governancepractices and explain deviations from the Code of CorporateGovernance 2005 in their annual reports for Annual GeneralMeetings held from 1 January 2007 onwards.

And see, further, Recommendations of the CCDG, December2004, for proposed revisions to the Code of CorporateGovernance, with detailed analysis of issues (and specificcomparisons with the ASX Code in Australia and the UKCombined Code), including recommendations regarding“comply or explain” (Proposal 1), independent boardmembers (Proposals 2, 3 and 5), selection and nominationprocess for directors (Proposal 6), remuneration matters,greater specific disclosure and more evaluation functionsfor the remuneration committee (Proposals 8-10), accountsand audits and more specific functions for the auditcommittee, including dealing with internal communicationsregarding possible improprieties (Proposals 11-12),communications with the shareholders (Proposal 13-15),including attendance of external auditors at shareholdersmeetings to answer questions (Proposal 15).

Global Compliance

Slovak Republic

Zjednoteny Kódex Správy a Riadenia SpoločnostíVychádzajúci z Princípov [Corporate Governance Principlesbased upon OECD Principles, at website of the BratislavaStock Exchange] September 2002, Principle 1 (accountabilityof the board to the shareholders, including detailed rulesregarding board functions and responsibilities, independenceat Principles 1.3 and 1.13), Principles 2 and 4 (equitabletreatment of shareholders, including notices and conduct of shareholders’ meetings), Principle 3 (duties of controllingshareholders, including certain disclosure duties), Principle5 (disclosure, including timing of price sensitive information(Principle 5.7), establishment of independent audit, nomin -ation and remuneration committees (Principle 5.10)),Principle 6 (responsibilites of institutional investors) anddetailed explanatory Annotations of the various Principlesby way of annex.

See, also, OECD Principles (2004) (The Slovak Republichas been an OECD member since 14 December 2000).

See, also, relevant provisions of the Obchodný zákonník č. 19/2007 [Slovakian Commercial Code, as amended],relating to companies, in effect from 1 February 2007.

Slovenia

Kodeks upravljanja javnih delniških družb [CorporateGovernance Code of the Slovenian = Ljubljana StockExchange (Borza)] (18 March 2004, as amended on 7February 2007), Article 1 (protection and equitabletreatment of shareholders), Article 2 (duties of themanagement board, including compensation and shareownership (Articles 2.2-2.3), conflicts of interest (Article2.4)), Article 3 (role of the supervisory board), includingindependence, compensation and share ownership (Articles3.3-3.4), conflicts of interest (Article 3.5), appointment ofcommittees, including an audit committee (Article 3.7), apersonnel committee (Article 3.8), a remuneration committee(Article 3.9)), Articles 4.10 and 7.1.6 (compliance withcorporate governance principles), Article 4.11 (actions in the event of takeover offers), Article 5 (the board of

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directors and executive director), Article 7 (audits andinternal controls), Article 8 (public disclosure of information,including corporate governance), Article 8.17 (websitedisclosures).

See, also, relevant provisions of the Zakon o gospodarskihdružbah (“ZGD-1”) (Uradni list RS, št. 42/2006 (60/2006))[Law on Commercial Companies], as amended, includingArticle 1-70 (common provisions, duty to maintain businesssecrets (Article 39-40) and not to compete with the company(Article 41-42)), Article 53-70 (books and financial accounts,including layout of the financial statements, generalaccounting rules (Article 54), consolidated accounts (Article56) and certification of the financial results (Article 66)),Article 248 (fictitious transactions), Article 261 (granting of loans), Article 253-284 (management in general andsupervisory board, including audit committee (Article 280),Article 285-291 (board of directors), Article 292-317(general meeting of shareholders), Article 327-328(lawsuits for damages).

South Africa

Code of Corporate Practices and Conduct (King II Report,2002), with analysis and recommendations for enhancedcorporate governance, including role, selection, independ -ence and functions of the board, chairperson, chiefexecutive officer and non-executive directors (Section 1,Chapters 1-7), internal audit procedures and safeguards(Section 3, Chapters 1-3), accounting and auditing(Section 5, Chapters 1-5), compliance with laws, principlesof disclosure and role of shareholders and the media(Section 6, Chapters 1-8).

See, also, Appendix III (Directors’ Legal Duties), AppendixIV (Board Self-Evaluation), Appendix V (Model Terms ofReference for Board Committees), Appendix VI (SampleInternal Audit Charter), Appendix VII (Risk Managementand Internal Controls), Appendix VIII (Key Decisions inDeveloping a Code of Ethics).

See, also, relevant provisions of the Companies Act, 1973, as amended to 2004, including Article 208-251 (ondirectors) and Article 284-309 (accounting and disclosure).

Global Compliance

Spain

“Informe de la Comisión Especial para el Fomento de la Transparencia y Seguridad en Los Mercados y en lasSociedades Cotizadas” [a Report by Special GovernmentCommission to Foster Transparency and Security in theMarkets and in Listed Companies] (“Aldama Report”, 8January 2003) and the “Informe Olivencia. El Gobierno de las Sociedades Cotizadas: Documento de la ComisiónEspecial para el Estudio de un Código ético de los Consejosde Administración de las Sociedades: el Gobierno de lasSociedades Cotizadas” [a Report by Special GovernmentCommission for the Study of a Code of Ethics for theBoards of Directors of Listed Companies] (“OlivenciaReport”, 26 February 1998) (both setting forth numerousguidelines for Spanish listed companies).

See, also, various provisions of the Ley de SociedadesAnónimas 1564/1989 of 22 December 1989 [CommercialCompany Law] as amended by Law 26/2003 of 17 July2003 [Transparency Law], including Article 127 (duties ofdirectors) and Article 133 (liability of directors) and variousprovisions of the Ley del Mercado de Valores 24/1988[Capital Markets Act of 1988], including those pursuant toLaw 26/2003 of 17 July 2003: Article 114 (certain specificduties of directors), Articles 113 and 115 (all quotedcompanies must issue rules for the regulation of generalmeetings of shareholders and for internal regulation of the board of directors, copies of which must be supplied to the CNMV (Comisión Nacional del Mercado de Valores =Spanish Securities Markets Commission) and registered inthe Mercantile Registry), Articles 116 and 117 (all quotedcompanies must publish an annual corporate governancereport and publish certain information at their website).Similarly, see, CNMV Circular 1/2004 of 17 March 2004,pursuant to Order ECO/3722/203 of 26 December 2003issued in pursuance of Law 26/2003 of 17 July 2003dealing with the annual corporate governance report and its publication. Pursuant to Article 3 of Law 62/2003 of 30December 2003 [Financial System Reform Measures], all listed companies must appoint an audit committee.

See, also, Código Unificado de Buen Gobierno de lasSociedades Cotizadas [Unified Code for Good CorporateGovernance by Listed Companies], promulgated by the

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CNMV (also known as the “Cόdigo Conthe”, after its Chairperson,the President of the CNMV), includes a set of basic comply orexplain principles and general recommen dations (Chapter I),together with specific recommendations regarding theShareholders General Meeting, the Board of Directors and theBy-laws (Chapter II), and Definitions (Chapter III). The UnifiedCode was adopted on 22 May 2006, to take effect with respectto listed companies when presenting their Annual CorporateGovernance Reports for the year 2007, during the first sixmonths of 2008 (Acuerdo del Consejo de la CNMV 22 de mayode 2006 = Resolution of the CNMV Council dated 22 May 2006).

Sri Lanka

Rules on Corporate Governance for Listed Companies, proposed by the Institute of Chartered Accountants of SriLanka, in conjunction with the Securities & ExchangeCommission of Sri Lanka, in consultation with the ColomboStock Exchange (adopted 5 January 2007) and to be read inconnection with the Stock Exchange Listing Rules: Article 1-2(board of directors, including definition of independentdirector), Article 3 (disclosures relating to directors, conflicts ofinterest), Article 4 (remuneration committee), Article 5 (auditcommittee), Appendix (director certifications of information).

Listed companies are required, during the initial compliancestage, to publish a Table in their Annual Report relating to thefinancial year commencing on or after 1 April 2007 confirmingthat as at the date of the Annual Report they are in compliancewith the Corporate Governance standards set out in the ListingRules and, if not, explain why the company has not compliedwith identified, specific items. During the second compliancestage, it will be mandatory for listed companies to comply withthe Corporate Governance standards in the Listing Rules, witheffect from the financial year commencing on or after 1 April2008 and their Annual Report must contain the relevantaffirmative statements, to that effect.

See, also, relevant provisions of the Sri Lanka AccountingStandards, including, for example, SLAS 03 (revised 2005):Presentation of Financial Statements and SLAS 30 (revised2005): Related Party Disclosures and relevant provisions of theSri Lanka Companies Act (No. 17 of 1982), as amended, andStock Exchange Listing Agreement.

Global Compliance

Sweden

Svensk kod för bolagsstyrning [Swedish Code of CorporateGovernance] (various organisations constituting ”the Code Group”, including the Stock Exchange Committee(Näringslivets Börskommitté NBK) 16 December 2004: Rule 1 (the shareholders meeting, including adequatenotices (Rules 1.1.1-1.1.3), board, management andauditor attendance at shareholders’ meetings (Rules 1.3.1-1.3.2), conduct of the shareholders’ meetings (Rules1.4.1-1.4.5); Rule 2 (appointing the board of directors and the auditor, including detailed rules regarding thenomination committee and its role regarding directors and auditors (Rules 2.1.1-2.3.5), directors’ election andremuneration (Rules 2.2.1-2.2.7), evaluation of the boardby the evaluation committee (Rule 2.3.1), auditor selectionand fees (Rules 2.3.1-2.3.5); Rule 3 (duties of the board of directors (Rules 3.1.1-3.1.2), including size andcomposition of the board (Rules 3.2.1-3.2.6), fiduciary(trustee) nature of directors’ responsibilities (Rules 3.3.1-3.3.4), independent judgment (Rule 3.3.2), role of thechairperson of the board (Rules 3.4.1-3.4.4), corporategovernance reporting (Rules 5.1.1-5.1.3), role of the boardin financial reporting matters (Rule 3.6.2), in internalcontrols and internal audit functions (Rules 3.7.1-3.7.3)and in connection with the external auditor (Rule 3.8), withdetailed rules regarding the audit committee (Rules 3.8.2-3.8.3); Rule 4 (management personnel, including themanaging director (Rules 4.1.1-4.1.2), managementremuneration (Rules 4.2.1-4.2.3), duties of the company’sauditors (Rule 3.6.1, 3.6.3 and 3.7.2), corporate governancereport to be included in company annual report and atwebsite (Rule 5.1.1 and 5.1.3). See, also, various relatedRegulations, most recently Anvisning Nr. 3-2006(Regulation Nr 3-2006 dated 16 December 2006).

The Code has been in effect at the Stockholm StockExchange since 1 July 2005.

See, also, relevant provisions of the Ny Aktiebolagslag [new Swedish Companies Act (SFS 2005:551) and theCompanies Ordinance (SFS 2005:559)], in effect from 1 January 2006.

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Switzerland

Code suisse de bonne pratique pour le gouvernementd’entreprise [English and German versions both entitled“Swiss Code of Best Practice for Corporate Governance”],July 2002, Article I (highest priority given to shareholderrights and powers, with special emphasis on various legalrights guaranteed under Swiss law, with detailed rulesregarding shareholders’ meetings, disclosures and votingprocedures, Articles I.3-I.7)), Article II (functions andduties of the board of directors and executive management,with specific references to mandatory requirements of theSwiss Code of Obligations, with respect to the same,composition of the board (Articles II(b)12-II(b)13, includingindependence and ongoing training requirements), proceduresand chairmanship of the board (Articles II(c)14-II(c)15),conflicts of interest and insider information (ArticlesII(d).16-II(d).17), joint or separate functions of thechairman and chief management executive (Article II(e)),internal control systems and risk and compliance management(Articles II(f)19-II(f)20), board committees (auditcommittee, Articles II(g)23-II(g)24, compensationcommittee, Articles II(g)25-II(g)26, nomination committee,Article II(h)), Article III (audits and auditors), Article IV(disclosures, in annual reports and as required by the Swiss Stock Exchange and incorporating the Swiss StockExchange Directive on information relating to CorporateGovernance of 17 April 2002).

See, therefore, Richtlinie betreffend Informationen zurCorporate Governance (Corporate Governance-Richtlinie,“RLCG”), Directive concernant les informations relatives auCorporate Gouvernance (Directive Corporate Governance,“DCG”) [Swiss Stock Exchange Directive on informationrelating to Corporate Governance], 17 April 2002, Rule 1(disclosure of group structure and shareholdings), Rule 2(disclosure of capital structure), Rule 3 (detailed informationto be disclosed regarding the board of directors, includingother business affiliations and board of director memberships),Rule 4 (disclosures regarding senior management, includingother business affiliations and details of the managementcontract with the issuer), Rule 5 (rules regarding disclosure

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of compensation and loans, Rules 5.1-5.9, share options at Rule 5.6), Rule 6 (equitable treatment of shareholders),Rule 7 (changes of control and takeover measures), Rule 8 (auditors), Rule 9 (information and media policy).

See, also, Richtlinie betreffend Anforderungen an dieFinanzberichterstattung (Finanzberichterstattungs-Richtlinie, “RLFB”), Directive concernant les exigences enmatière d'établissement des rapports financiers (Directiveétablissement des rapports financiers, “DRF”), [Directive on Requirements for Financial Reporting [Swiss StockExchange Financial Reporting Directive, “DFR”], effectivefrom 1 January 2005.

See, also, the Listing Rules of the SWX Exchange(December 2006), including Article 74a (mandatorydisclosure of management transactions in listed companysecurities), with revised Articles 2, 4, 74a, 81, 82, 82a, 83and 83a (enacted on 29 March 2006 by resolution of theAdmission Board and approved by the Swiss FederalBanking Commission on 5 September 2006) in force from 1 January 2007.

See, further, (1) SWX Communiqué No. 04/2006 of 28 July2006 (changes to the Directive on Information Relating toCorporate Governance (DCG)), (2) SWX Communiqué No.06/2006 of 25 September 2006 (main focus for the reviewof the annual reports for 2006 and 2006/2007 in terms ofcompliance with the Directive on Information relating toCorporate Governance), (3) Directive on InformationRelating to Corporate Governance (Corporate GovernanceDirective, DCG) of 17 April 2002 and 29 March 2006(entry into force on 1 January 2007, for financial yearsstarting on or after 1 January 2007) and (4) SWX Checklistfor the Corporate Governance Directive.

Compare the “Governance Familie: Unternehmen: Umfeldfür Familienunternehmen” (Code of Good CorporateGovernance for Swiss family-owned companies), December 2006, promulgated by the Vereinigung derPrivaten Aktiengesellschaften (Swiss Association of Private Companies).

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Taiwan

The Taiwan Stock Exchange (臺灣證券交易所) has publishedat its website the Code of Corporate Governance in Taiwan(December 2001) of the Securities and Futures Institute ofTaiwan: Article 4.1 (duties and responsibilities of board ofdirectors), Article 4.2 (supervisory board), Article 4.3(meetings of shareholders), Article 4.4 (disclosure andtransparency) and other detailed provisions andrecommendations.

See, also, detailed Report on Project for Planning,Promotion and Implementation of Corporate GovernanceSystem in Taiwan (2005) (at website of The Taiwan StockExchange).

Further relevant provisions are to be found in the TaiwanCompany Act (公司法) and the Taiwan Securities &Exchange Law and their related rules and regulations. See,for example, Company Act, Article 29-33 and 192-215(general rules regarding the duties and responsibilities of company directors), Article 170-191 (conduct ofshareholders’ meetings), Article 206 and Article 223(director conflicts of interest and avoidance of self-dealing),Article 214 (derivative lawsuits by shareholders).

See, also, 公開發行公司年報應行記載事項準則 [RegulationsGoverning Information to be Published in Annual Reports ofPublic Companies (2006)], including corporate governancedisclosures, Article 7(7).

Thailand

The Stock Exchange of Thailand’s Principles of GoodCorporate Governance for Listed Companies 2006(หลกการกำกบดแลกจการทดสำหรบบรษทจดทะเบยน ป � 2549)contain various recommendations regarding directorconduct, internal controls and disclosures, in the context of corporate governance ("การกำกบดแลกจการ", or"ธรรมาภบาลภาคเอกชน"). Code for Directors: Principle I

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and related recommended best practices (rights ofshareholders), Principle II and related recommended bestpractices (equitable treatment of shareholders), Principle IIIand related recommended best practices (role ofstakeholders), Principle IV and related recommended bestpractices (disclosure and transparency), Principle V andrelated recommended best practices (responsibilities of theboard of directors, including the audit committee, boardmeetings, remuneration and board and management training).

Listed companies are requested to commence disclosing their implementation of the Principles in their 2007 AnnualStatements (Form 56-1) and their annual reports, with the first such reports being due in March and April 2008,respectively.

The aforementioned Principles update the 15 Principlespromulgated by The Stock Exchange of Thailand in March 2002.

Trinidad and Tobago

Corporate Governance Guideline principles were promulgatedin May 2006 by the Central Bank of Trinidad & Tobago, for the guidance of financial institutions and are relevant forcompanies in general: Article 4 (definitions of key terms,including independent director), Article 6 (composition of theboard), Article 7 (role and function of the board), Article 8(audit committee), Article 9 (conduct review committee),Article 10 (compensation committee), Article 11 (nominationcommittee), Article 12 (risk management committee), Article13 (succession planning), Article 14 (board meetings) andArticle 15 (governance of conglomerates and corporategroups).

See, also, relevant provisions of the Trinidad & TobagoCompanies Act, as amended, for example, Article 60-86(management of companies), Article 87-92 (liabilities ofdirectors), Article 93-96 (conflicts of interest), Article 99 (duty of care), Article 106 (remuneration), Article 107-147(shareholders and shareholders’ meetings), Article 151-174(financial statements, accounts and audits).

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Global Compliance

Turkey

Kurumsal Yönetim İlkeleri [Corporate GovernancePrinciples] (Capital Markets Board of Turkey), June 2003(amended February 2005), Section I (shareholders,including access to information (Sections I.2.1-I.2.2),participation in shareholders’ meeting (Sections I.3.1-I.3.2.9), conduct of shareholder meetings (SectionsI.3.3.1-I.3.4.13), written audit report available to themeeting (Section I.3.5), voting rights (Section I.4.1.4),protection of minority rights (Section I.5), dividend rights(Sections I.6.1-I.6.6), equal treatment of shareholders(Sections I.8.1-I.8.3)), Section II (public disclosures andtransparency, including principles and methods of disclosure(Sections II.1.1- II.1.10.3), including use of the companywebsite (Section II.1.11), public disclosure of shareholdingand other relations between the company and its directorsand management (Sections II.2.1-II.2.6), periodicalfinancial statements and public reports (Sections II.3-1-II.3.2.5), external audit functions, including rotation(Section II.4.2), separation of audit and consultancyfunctions (Sections II.4.3.1-II.4.3.2)), Sections II.5.1-II.5.1.2 (trade secrets and insider trading), Section III(treatment of stakeholders, including company policy onhuman resources (Sections III.4.1-III.4.7)), Section IV (the duties and functions of the board of directors,including ensuring legal compliance (Section IV.1.4),devotion of care, skill and time to the best interest of thecompany and its shareholders and non-competition withthe company (Sections IV.2.3, 2.7, 2.8 and specific tasks at Sections IV.2.14(a)-(k)), election and composition of theboard of directors (Sections IV.3-1-IV.3.4, independencedefined at Section IV.3.3.5), remuneration (Sections IV.1-IV.4), board committees (Section IV.5.1- IV.5.7.2, includingaudit committee (Sections IV.5.6.1-IV.5.6.10) andcorporate governance committee (Sections IV.5.7.1-IV.5.7.2)).

See, also, Kurumsal Yönetim En İyi Uygulama Kodu:Yönetim Kurulunun Yapısı ve İşleyişi [CorporateGovernance Code of Best Practice: Composition andFunction of the Board of Directors] (Turkish Industrialists’and Businessmen’s Association (“TÜSİAD”)), December2002, the board and its responsibilities (Section 1), board

Global Compliance

membership criteria and composition (Sections 2 and 3,independence defined at Section 3, Table 1, and termlimits at Section 8), election and training of directors(Section 4), separation of functions of chairman ofthe board and the CEO (Section 5), directors’ meetings(Section 8), directors’ compensation (Section 10),evaluation of the directors and CEO (Section 11),relations with shareholders and the media (Section12), independent board committees (Section 13, auditcommittee at Section 13.1, corporate governancecommittee at Section 13.2), duties to shareholdersand at shareholders’ meetings (Sections 15.1-15.4).

See, also, OECD Principles (2004) (Turkey has beenan OECD member since 2 August 1961).

See, further, relevant provisions of the Turkish CommercialCode, as amended, and the Turkish Capital Market Law,Law No. 2499, as amended (Official Gazette number26454, 6 March 2007).

United Arab Emirates

Corporate Governance Code (2007) of the Abu DhabiSecurities Market, including, Stage One CorporateGovernance: Rule 1.3 (disclosure of interest by management),Rule 1.5 (documented disclosure procedures), Rule 1.6(auditor’s report on transaction status), Rule 1.8 (appointmentof the external auditors), Rule 1.9 (tasks of the auditors),Rule 1.10 (audit committee), Rule 1.11 (managementsummary), Rule 1.12 (directors’ remuneration, interests and trading), Rule 1.13 (governance disclosure), Rule 1.14(mandatory disclosure), Rule 1.16 (disclosure of majortransactions), Rule 1.17 (disclosure of material relatedparty transactions); Stage Two Corporate Governance: Rule2.1 (shareholder confirmation of appointment by directors),Rule 2.3 (term of appointment), Rule 2.4 (rotation), Rule2.5 (exceptions to rotation), Rule 2.6 (appointment ofdirectors to be voted on individually), Rule 2.8 (directors’remuneration), Rule 2.9 (fixing remuneration or any otherbenefits made to directors); and related Guidelines For Best Practice: Article 1 (constitution of the board), Article 2 (meetings of the board), Article 4 (internal audit and

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Global Compliance

internal control), Article 5-6 (financial statements andinformation), Article 11 (statement of duties, powers and responsibilities), Article 12 (mandatory disclosures),Article 13 (additional disclosures), Article 14 (sub-committees), plus, related Appendices and Definitions.

See, also, the corporate governance work and studies of Hawkamah – the Institute of Corporate Governance, in Dubai.

Ukraine

Corporate governance in Ukraine has been developing onthe basis of various laws and regulations, including theUkrainian Securities & Stock Market State Commission’sregulations and rulings. The primary legal sources arelocated in the Civil Code and Commercial Code (2003, as amended), the Law on Business Companies (1991, as amended), the Law On Securities and Stock Exchange(1991, as amended) and the Law on State Regulation ofthe Securities Market in Ukraine (1996, as amended). The Securities Commission has approved variouscorporate principles which are in line with OECDprinciples, including the Принципи корпоративногоуправління [Ukrainian Corporate Governance Principles]which were approved by the Securities Commission inDecember 2003 (Протокол засідання Комісії від 11грудня 2003р. № 54): Principle 1 (corporate goals ofachieving maximum shareholder value and revenues),Principle 2 (shareholder rights, including exercise of rightsat shareholders’ meetings, access to accurate companyinformation and equitable treatment in general andprotection against abuse of insider information (Principle2.5)), Principle 3 (roles of the supervisory board and theexecutive board, set out in detail (Principles 3.1.1-3.3.6),including an audit committee, a nomination committeeand a compensation committee (Principle 3.1.9), Principle4 (information transparency and disclosure requirements),Principle 5 (financial controls, reports and audits) and Principle 6 (respecting the interests of stakeholders).

Global Compliance

Note: By its letter dated 29 December 2006 №10/01/19913 the Ministry ofInternal Affairs of Ukraine and General Office of Public Prosecutor approved a regulation relating to a Resolution “On defining the information whichconcerns insider information”. There are also activities underway to revisecertain portions of the draft Law on Joint Stock Companies (letter of theSecurities & Stock Market State Commission dated 29 December 2006№10/01/19912). See, also, Посібник для членів Спостережних рад банків[Guidance for Members of the Supervisory Board of Banks in Ukraine] (20September 2006), promulgated by the International Finance Corporation(World Bank Group).

United Kingdom

The Listing Rules published by the UK Listing Authority(part of the Financial Services Authority) (the “UKLARules”), the City Code on Takeovers and Mergers and theRules Governing Substantial Acquisitions of Shares (forlisted companies) and the Combined Code on CorporateGovernance (“Combined Code”, July 2003, revised June2006) (which merges the recommendations of variouscodes and studies and is incorporated into the UKLA Rulesand applies for reporting years on or after 1 November2003), including various subsequent UKLA SourcebookAmendments (relating primarily to auditors and financialstatements and effective 1 November 2004).

Combined Code: Section A.1 (directors and collective role of the board for entrepreneurial leadership andresponsibility for the success of the company, includingspecific supporting principles for the duties of non-executive directors and specific guidelines regarding thefrequency of board meetings (Sections A.1.1 and A.1.3)and regarding insurance in respect of potential legal actionsagainst directors (Section A.1.5)), Section A.2 (duties ofthe chairman and chief executive, with clear separation of their powers and responsibilities), Section A.3 (boardbalance, size and independence, identification of independentdirectors and definition of independence (Section A.3.1)),Section A.4 (appointments of new directors to the board,including role of the nomination committee (Sections A.4.1-A.4.3, Section A.4.6) and limitation on multiple directorshipsand executive or non-executive positions (Section A.4.5)),Section A.5 (directors’ access to information and need forinduction training and ongoing updates to their personal jobskills and knowledge), Section A.6 (performance evaluationfor the board, for board committees and for individual

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Global Compliance

framework for the purposes of Section 404(a) of theSarbanes-Oxley Act (The Financial Reporting Council, 16December 2004), as well as various relevant provisions of The Companies Act, 2006.

Note: In UK usage, the term “director” may often include persons with executivemanagement responsibilities who in other jurisdictions might be called a chiefexecutive officer, a president, an executive manager or some other equivalentterm and who, in those jurisdictions, would not normally be a “director” or a“member of the board of directors”. UK companies generally only have one tier of directors, some of whom do not have any responsibilities for executive management in the company (“non-executive director”) and some of whom do have such executive management responsibilities (“executive director”).

On 18 April 2007, The Financial Reporting Council initiated an assessment(“Review of the Impact of the Combined Code”) regarding the progress made in implementing the Combined Code on Corporate Governance and requestedthe views and comments of listed companies, directors, investors and otherinterested parties by 20 July 2007. Its findings are to be published by the end of 2007.

United States of America

There is no generally agreed upon single “corporategovernance code”, as such. The rules to observe arecontained in a number of federal laws, rules and regulations,in conjunction with the laws in the various US states andlisting rules of the regulated securities markets in thevarious US states, as well as the recommendations of various panels and study groups. See, for example:

• American Law Institute, Principles of CorporateGovernance: Analysis and Recommendations(2004), Sections 3.01-3.04, 4.01, 5.01-5.09 (functionsof directors and officers, including duty of care, duty of fair dealing, required disclosure of conflicts of interest, fair executive compensation, abuse of insiderinformation), Section 3A.01 (composition of board of directors of public companies, independence,“disinterested” directors), Sections 3.05, 3A.02-3A.03(audit committees in public companies), Section 3A.04(nominating committees in public companies), Section3A.05 (compensation committees in public companies),Section 6.01 (roles of directors and others in transactionsin control and tender offers), Sections 7.01-7.19 (derivativelawsuits and other remedies for breach of duty), Sections7.20-7.20 (indemnification and insurance).

Global Compliance

directors), Section A.7 (re-election of directors, termlimitations and planning for progressive election of newdirectors), Section B.1 (the level and make-up of directors’remuneration, rewards to be significantly linked to theactual performance of the company and of the individual,poor performance not to be rewarded (Section B.1.5),share based compensation and circumstances forshareholder approval (Sections B.1.2-B.1.3, SectionB.2.4)), evaluation of termination costs (Sections B.1.4-B.1.5), Section B.2 (principles and procedures fordetermination of remuneration, with no director involved in setting their own remuneration, remuneration committeeof independent non-executive directors (Section B.2.1) andavoidance of conflicts of interest), Section C.1 (financialreporting), Section C.2 (internal control), Section C.3 (auditcommittee and auditors, including detailed rules at SectionsC.3.1-C.3.7), Section D.1 (relations with institutionalshareholders), Section D.2 (relations with shareholders in general, including conduct of shareholders’ meetings),Section E (special duties applicable to institutionalshareholders, including evaluation of the company’sgovernance disclosures, especially those relating to boardstructure and composition (Section E.2)), plus CombinedCode Schedule A (detailed provisions on the design ofperformance related compensation for directors), ScheduleB (guidance on directors’ duties of care, skill and diligenceand the liability of non-executive directors), Schedule C(guidelines for the detailed corporate governance report to be included in the annual report of the company).

The Combined Code includes various additional guidancenotes and good practice suggestions: (i) on internalcontrols, the “Turnbull Guidance”; (ii) on audit committees,the “Smith Guidance”; and (iii) on the roles of thechairman, the non-executive directors, the remunerationcommittee, the nomination committee, on the specific duediligence items for prospective new directors to evaluatebefore accepting appointment as a director and onperformance self-evaluation criteria for the board, for board committees and for individual directors, collectivelythe “Higgs Suggestions for Good Practice”.

See, also, Internal Control: Revised Guidance for Directorson the Combined Code (The Financial Reporting Council,October 2005) and The Turnbull guidance as an evaluation

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entirely of independent directors and with a specific written charter of standards and criteria and regularduties, including specific interactions with the company’sexternal independent auditors and peer review procedures),Rule 303A.9 (listed companies must adopt and disclosecorporate governance guidelines which address directorqualification standards and responsibilities, director access to management and, as necessary and appropriate,independent advisors, director compensation, orientationand continuing education, management succession,annual performance evaluation of the board), Rule303A.10 (listed companies must adopt and disclose a codeof business conduct and ethics for directors, officers andemployees, and promptly disclose any waivers of the code for directors or executive officers regarding conflicts of interest, prohibited corporate opportunities, duties ofconfidentiality and fair dealing, personal use of companyassets, compliance with all laws, rules and regulations(including insider trading laws) and encouraging thereporting of any illegal or unethical behavior), Rule303A.11 (listed non-US private issuers must disclose any significant ways in which their corporate governancepractices differ from those followed by domestic UScompanies under NYSE listing standards) and Rule303A.12 (every listed company’s CEO must certify to theNYSE each year that the CEO is not aware of any violationby the company of NYSE corporate governance listingstandards and must promptly notify the NYSE in writingafter any executive officer of the listed company becomesaware of any material noncompliance with any applicableprovisions of Section 303A).

• Securities & Exchange Commission, numerous lawsand regulations, including Sections 12, 13(a), 15(d), 16 of the Securities & Exchange Act of 1934, Sarbanes-Oxley(“SOX”) (Section 2 (key definitions), Section 101(establishment and powers of PCAOB), Section 103(auditing quality control, independence standards andrules), Section 105(b) (use of documents and privilege),Section 106 (non-US public accounting firms), Section 108 (accounting standards), Sections 201-204 (auditorindependence, audit partner rotation, auditor reports toaudit committee)), Section 206 (conflicts of interest),Section 301 (public company audit committees), Section

• Breeden Report: Restoring Trust (August 2003) (Report to United States District Judge Rakoff, regarding MCI, Inc.and “Corporate Governance for the Future”), detailedanalysis and specific recommendations regarding enhanced corporate governance, internal controls and verifiable checks and balances and external reportingduties, including skills and independence of directors and audit committee members (Recommendations 1.02-1.10,5.11), director training (Recommendation 1.06),compensation (Recommendations 3.01-4.09), advancedisclosure of stock transactions (Recommen dation 3.05),mandatory expensing of options (Recommendations 4.08),role of the audit committee (Recommendations 5.01-5.15),mandatory auditor rotation (Recommendation 5.15),personal use of corporate assets (Recommendations 5.07), role of the corporate governance committee(Recommendations 6.01-6.06), role of the compensationcommittee (Recommendations 7.01-7.09), role of the riskmanagement committee (Recommendations 8.01-8.05),implementation of ethics and legal programmes, including a strong internal legal department (Recommendations10.01-10.05).

• NASDAQ and NYSE. See, SEC Release No. 34-48745,“NASD and NYSE Rulemaking: Relating to CorporateGovernance”, 4 November 2003.

NYSE, see also Listing Rule 303A (30 June 2003 and 4November 2003): Rule 303A.1 (listed companies musthave a specifically identified majority of independentdirectors, detailed definition at Rule 303A.2 and applyingwith minimum one-year and specified three-year “look-back” periods, Rule 303.A.2(b) and Commentary), Rule303A.3 (internal checks and balances within the board,regular separate meetings of independent directors, Rule303A.4 (listed companies must have a nominating/corporategovernance committee composed entirely of independentdirectors and with a specific written charter of standardsand criteria and regular duties), Rule 303A.5 (listedcompanies must have a compensation committeecomposed entirely of independent directors and with a specific written charter of standards and criteria and regular duties), Rule 303A.6-Rule 303A.7 (listedcompanies must have an audit committee composed


8392, 34-49313, IC-26357, “Management's Report onInternal Control over Financial Reporting and Certificationof Disclosure in Exchange Act Periodic Reports” (extensionof compliance dates), promulgated 24 February 2004,effective 14 August 2003, and SEC Release Nos. 33-8545,34-51293, “Management’s Report on Internal Control Over Financial Reporting and Certification of Disclosure inExchange Act Periodic Reports of Non-Accelerated Filersand Foreign Private Issuers”, promulgated 2 March 2004,effective 14 August 2003

SEC Release Nos. 33-8185, 34-47276, IC-25919, “FinalRule: Implementation of Standards of Professional Conductfor Attorneys” (Section 205, up-the-ladder reporting,pursuant to Sarbanes-Oxley Section 307, Section 05.2(k),Qualified Legal Compliance Committee (“QLCC”), effective 5 August 2003

SEC Release Nos. 34-47890, IC-26050, FR-71, “Final Rule:Improper Influence on Conduct of Audits", effective 26 June 2003

SEC Release Nos. 33-8183; 33-8183A 34-47265; 35-27642; IC-25915; IA-2103, FR-68, “Final Rule:Strengthening the Commission's Requirements RegardingAuditor Independence" [and 29 March 2003 "TechnicalCorrections"], effective 6 May 2003

SEC Release Nos. 33-8220, 34-47654, IC-26001, “Final Rule: Standards Relating to Listed Company AuditCommittees", effective 25 April 2003

SEC Release Nos. 33-8182, 34-47264, FR-67, InternationalSeries Release No. 1266, "Final Rule: Disclosure inManagement's Discussion and Analysis about Off-BalanceSheet Arrangements and Aggregate ContractualObligations", effective 7 April 2003

SEC Release Nos. 33-8180, 34-47241, IC-25911, FR-66,“Final Rule: Retention of Records Relevant to Audits andReviews", effective 3 March 2003

SEC Release Nos. 33-7881, 34-43154, IC-24599, “FinalRule: Fair Disclosure (Selective Disclosure and InsiderTrading” (“Regulation FD”) (regulates "use" or "knowing

302 (corporate responsibility for financial reports),Section 303 (improper influence on conduct of audits),Section 306 (insider trades during pension fund blackoutperiods), Section 307 (rules of professional responsibilityfor attorneys, including up-the-ladder reporting), Section 401 (enhanced financial disclosures, including off balancesheet transactions (Section 401(a)), Section 402(enhanced conflict of interest provisions), Section 403 (disclosures of transactions involving directors,management and principal shareholders), Section 404 (management must assess and report on thecompany’s internal controls), Section 406 (code of ethicsfor senior financial officers), Sections 407-409 (variousdisclosures, including “real time” issuer disclosures),Section 501 (analysts’ conflicts of interest), Section 801(corporate and criminal fraud accountability, includingfalsification and destruction of corporate audit records),Section 806 whistleblower protection, including 18 USCSection 1107)).

See also SEC Commission Statement on Implementationof Internal Control Reporting Requirements (Release2005-74, 16 May 2005)

SEC Regulations S-K and S-X, Rule 10b5.

Among numerous other rules and regulations of the SEC, see, for example:

SEC Press Release 2004-175 (16 December 2004),regarding Financial Accounting Standards Board (FASB)Statement 123R (16 December 2004) (on “expensing” ofstock options and other equity-based compensation). See,also, Press Release 2005-57 (14 April 2005): CommissionAmends Compliance Dates for FASB Statement No. 123Ron Employee Stock Options SEC Release No. 34-48745,“NASD and NYSE Rulemaking: Relating to CorporateGovernance”, 4 November 2003

SEC Release Nos. 33-8238, 34-47986, IC-26068, “FinalRule: Management's Report on Internal Control overFinancial Reporting and Certification of Disclosure inExchange Act Periodic Reports", promulgated 5 June 2003,effective 14 August 2003. See also SEC Release Nos. 33-


innocent parties; whether complicity in the violation iswidespread throughout the corporation; the level of intenton the part of the perpetrators; the degree of difficulty indetecting the particular type of offense; the presence orlack of remedial steps by the corporation; the extent ofcooperation with Commission and other law enforcementagencies).

The SEC voted to propose changes to disclosurerequirements concerning executive compensation andrelated matters (Press Release Ref. 2006-10, 17 January2006) and such proposed rules were promulgated on 27January 2006 by the SEC on “Executive Compensation and Related Party Disclosure” (Release Nos. 33-8655; 34-53185; IC-27218; File No. S7-03-06 RIN 3235-AI80).

SEC Release No. 34-55540, International Series ReleaseNo. 1301, Termination of a Foreign Private Issuer'sRegistration of a Class of Securities under Section 12(g)and Duty to File Reports under Section 13(a) or 15(d) ofThe Securities Exchange Act of 1934, effective 4 June 2007.

Venezuela

Principios de Gobierno Corporativo G.O. N° 38.129 de 17 de Febrero de 2005 [Principles of Good CorporateGovernance], adopted by the Comisión Nacional de Valores[Venezuelan National Securities Commission] by ResolutionNo. 19-1-2005 on 2 February 2005 and published in theOfficial Gazette on 17 February 2005 as document N°38.129: Article 1.1 (transparency and disclosure), Article1.2-1.4 (definition of independent director), Article 1.5(adoption of corporate governance policy), Article 2.1-2.2(audit committee and its duties and responsibilities).

See, also, relevant provisions of [1] the Código deComercio [Commercial Code], for example, Article 242(board of directors of joint stock companies), [2] the Leyde Mercado de Capitales G.O. N° 36.565 del 22-10-1998[Securities Market Law], [3] Normas dictadas por laComisión Nacional de Valores [Rules of the VenezuelanNational Securities Commission], [4] Reglamento Internode la Bolsa de Valores de Caracas [Internal Rules and

possession" of material nonpublic information), effective 23 October 2000

See also various rules and releases of the Public CompanyAccounting Oversight Board (“PCAOB”), including (amongmany others): PCAOB Release No. 2004-001 (9 March2004), “An Audit of Internal Control over Financial ReportingPerformed in Conjunction with an Audit of FinancialStatements” (approved by the SEC on 17 June 2004)

PCAOB Release No. 2004-005 (9 June 2004), “Final RulesRelating to the Oversight of Non-U.S. Public AccountingFirms” (approved by the SEC on 30 August 2004)

PCAOB Release No. 2005-009 (16 May 2005), “PolicyStatement Regarding Implementation Of Auditing Standard No. 2, An Audit Of Internal Control Over Financial Reporting Performed In Conjunction With An Audit Of Financial Statements”

On 29 March 2007, PCAOB announced that it will considerproposing an auditing standard, "Evaluating Consistency of Financial Statements", and related amendments to the Board’s interim standards regarding the auditor’sresponsibilities to evaluate and report on matters relating to the consistency of the financial statements.

See also US Sentencing Guidelines (November 2004)including their emphasis upon consistent promotion andcompliance of good practices throughout the corporateorganisation and the need of management to allocateadequate resources to that procedure (Guidelines, §8B2.1,pages 476-481)).

Note: The Sentencing Guidelines are affected by the US Supreme Court case of US v. Booker (and Fanfan) (decided 12 January 2005, Cases 04-104 and 04-105) but remain relevant in the general corporate governance arena.

See, further, the SEC’s Statement Concerning FinancialPenalties (4 January 2006) (with the following summaryrelevant penalty factors: the presence or absence of adirect benefit to the corporation as a result of the violation;the degree to which the penalty will recompense or furtherharm the injured shareholders; the need to deter theparticular type of offense; the extent of the injury to

statements and reports, including report on businessoperation, financial report or statement, report onevaluation of management performance), Article 147-149(corporate groups, conglomerates and holding companies)and Article 165 (penalties and sanctions).

The Enterprise Law (2005) should also be read inconjunction with the new Investment Law (2005).

See, also, Thông Tư: Hướng dẫn tiêu chuẩn, điều kiệnthành lập và hoạt động đối với doanh nghiệp kiểm toán[Ministry of Finance Circular No: 60/2006/TT-BTC dated 28June 2006 “Providing guidelines on criteria and conditionsfor establishment and operation of auditing enterprises”],pursuant to the Law on Enterprises (2005). There are alsovarious Ministry of Finance Decisions regarding VietnameseAuditing and Accounting standards, pursuant to the Lawon Accounting No. 03/2003/QH11 dated 17 June 2003,including Decision No. 100/2005/ QĐ-BTC (28 December2005) (including provisions for contingent assets andliabilities) and Decision No. 101/2005/QĐ-BTC (29December 2005) (including audit communicationsinvolving persons charged with governance).

Note: Corporate governance of private and of state-owned enterprises isevolving. The Ministry of Finance (through its State Securities Commission)is undertaking various measures to enhance the securities market in Vietnam,in conjunction with the Ho Chi Minh City Securities Trading Center and theHanoi Securities Trading Center (HASTC). Thus, for example, the Ministry hasprepared guidelines for implementation of the Luật Chứng Khoán [SecuritiesLaw, which was enacted on 29 June 2006 and entered into force as of1 January 2007] and, on 15 January 2007, the Ministry disclosed relevantpolicy guidelines for corporate governance in the insurance industry.


Regulations of the Caracas Stock Exchange] and [5]Reforma de las Normas Relativas a las AuditoriasExternas G.O. N° 38.149 de 17 de Marzo de 2005[Revised Rules regarding External Audits, as publishedin the Official Gazette on 17 March 2005].

VietnamLuật Doanh nghiệp ngày 29/11/2005 [the Vietnamese“Enterprise Law (2005)”, dated 29 November 2005] hasbeen in effect since 1 July 2006 and contains variousprovisions relevant to corporate governance (Quảntrị doanh nghiệp), including, Article 8-10 (rights andobligations of enterprises) (Điều 8 đến 10: Quyền vànghĩa vụ của doanh nghiệp), Article 12 (documentretention) (Điều 12: Chế độ lưu giữ tài liệu của doanhnghiệp), Article 38-62 (limited liability companies) (Điều38 đến 62: công ty trách nhiệm hữu hạn), Article 77-129 (joint stock companies which may issue securitiesto the public, including rights and obligations ofshareholders (công ty cố phần – có quyền phát hànhchứng khoán các loại) (Article 79-84) (Điều 79 đến84: Quyền và nghĩa vụ của cổ đông), shareholders’meetings (đại hội đồng cổ đông) (Article 96-107),the board of management (Hội đồng quản trị), includingits qualifications, meetings, record keeping and duties(Article 108-115), directors and general directors(Giám đốc hoặc Tổng giám đốc công ty) (Article 116),remuneration (thù lao, tiền lương và các lợi ích kháccủa thành viên Hội đồng quản trị, Giám đốc hoặc Tổnggiám đốc) (Article 117), disclosure of related partytransactions and benefits (Article 118) )(Điều 118:Công khai các lợi ích liên quan – disclosure of relatedbenefits), duties of managers (Article 119) (nghĩavụ của người quản lý công ty), contracts subject toapproval by the shareholders or the directors (Article120) (Điều 120. Hợp đồng, giao dịch phải được Đại hộiđồng cổ đông hoặc Hội đồng quản trị chấp thuận), role,duties and remuneration of the board of supervision(Article 121-127) (quyền, nhiệm vụ, thù lao và các lợiích khác của Ban kiểm soát), financial matters includingannual statements and reports (Article 128-129) (Điều128: Trình báo cáo hàng năm: Submission of the annual

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