Slovenian Corporate Governance Code for Listed Companies

Reasons for the revision of the Code

There are three reasons for this revision:

1. In five years since the adoption of the previous version of the Code the regulatory environment in the field of corporate governance has changed. The key changes in the legislation during this period have been included particularly in major amendments to the Companies Act (ZGD-1), including comprehensive amendments that influenced the field of the companies' corporate governance, reporting and public disclosures on corporate governance. Changes have been brought to the Slovenian regulatory environment by – among other things – the implementation of the so-called Shareholder Rights Directive II (Directive (EU) 2017/828) and the Implementing Regulation (EU) 2018/1212 as regards the encouragement of long-term shareholder engagement, as well as of the Non-Financial Reporting Directive (NFRD). Other important issues at the EU level include corporate sustainability and sustainability reporting, which are increasingly being addressed in legally binding instruments rather than merely best practice recommendations.
2. In addition, during this time the international as well as Slovenian recommended practice of corporate governance has changed. New or revised Codes have been adopted by many other European countries (i.e., Austria, Belgium, Denmark, Finland, France, Germany, Italy, Lithuania, the Netherlands, Norway, Portugal, Spain, Sweden, Ukraine, the United Kingdom). New recommended practice of corporate governance has also been developed in Slovenia in the form of expert positions and recommendations published by the Slovenian Directors’ Association in response to the practical challenges of corporate governance, as well as new or updated autonomous sources (i.e., Guidelines for Audit Committees for External Audit Quality Monitoring, Agency for Public Oversight of Auditing and Slovenian Directors’ Association, 2018; Good Practice Recommendations on Employee Participation in Management and Supervisory Bodies, Slovenian Directors’ Association, 2018; Corporate Governance Code for Companies with Capital Assets of the State, Slovenian Sovereign Holding, 2021; A Practical Guide to Conflicts of Interest, Slovenian Directors’ Association, 2021; Guidelines on the Remuneration Policy and Remuneration Reporting for Members of Management and Supervisory Bodies - for Listed Companies, Slovenian Directors’ Association, 2018).
3. The third reason for amending the Code is the results of the analyses of the use and code compliance presented in the form of the Report on the Analysis of Compliance with the Slovenian Corporate Governance Code for Listed Companies for all public companies during the 2017 – 2020 period. The amendments were also influenced by feedback provided by issuers as the users of the Code. The analysis of compliance with the Code and issuers’ feedback made it clear which provisions of the Code the companies comply with and which disclosures of deviations from the Code are the most frequent. Moreover, it also became clear which provisions were not written clearly enough, which in turn is reflected in the quality of explanations of deviations from the code.