On Friday, August 21, the interim administration of Riga municipality approved the procedure for the management of the capital shares and capital companies owned by the municipality, the portal “Delfi” found out in the municipality.
Content will continue after the ad
Advertising
–
The new regulations determine the procedure by which the management of capital shares in capital companies is implemented in the local government, as well as certain issues related to the management of capital shares and capital company are addressed.
The main objectives of the governance procedure are to introduce common corporate governance principles to ensure sustainable, modern, honest, responsible and efficient operation of the capital company, to promote coordinated and predictable cooperation between the municipality and the capital company within the corporate governance system, as well as to create preconditions for achieving capital goals. to increase.
The rules include the principles of corporate governance in accordance with OECD the principles of world best practice specified in the guidelines for corporate governance of state-owned capital companies, recommendations of the Baltic Institute of Corporate Governance and applicable “Nasdaq Riga“corporate governance principles and recommendations.
The general principles of share management are also defined – clear division of roles, powers and responsibilities, clear financial and non-financial objectives, open, fair and professional nomination process for board and council members, duty of care, implementation of ethical and responsible business practices, conflict of interest and corruption. risk prevention, access to information and transparency, respect for competitive neutrality, respect for political and religious neutrality, the provision of good quality services and a sustainable financial situation, and the promotion of open dialogue and the exchange of ideas.
The procedure was prepared by the Advisory Board for the Management of Municipal Capital Shares and Capital Companies. Representatives of Riga capital companies and departments discussed the procedure in two open forums before approving it.
The development of a new governance policy was one of the main objectives of the newly established advisory board and will be the basis for changes in the governance of capital companies.
“This procedure was created at a time when Riga municipal companies have been torn apart by scandals, audits have shown significant shortcomings, while the political and non-professional management of the last decade has destroyed trust in the eyes of both the public and creditors. Creditors isolate themselves from municipal companies. funding for their development is inaccessible or very expensive, and the adoption of this arrangement is a first step in creating a new governance culture, and the next political leadership, local authorities and officials, including business management, must now demonstrate that corporate governance is a priority, “explains Andris Grafs, Vice President and Head of the Baltic Institute of Corporate Governance in Latvia, Head of the Advisory Board.
Edvīns Balševics, the head of the interim administration of the Riga City Municipality, emphasizes that improving the governance of Riga city capital companies was one of the main tasks that the people of Riga expected from the interim administration. “Today, an important step has been taken for us to move towards this, because the approved document is a guide that has been very lacking in the municipality so far and which will be useful for capital companies and the new council in the future,” adds Balševics.
The approved procedure clearly defines the principles of good governance that will be followed when managing Riga city capital companies. Further work will be to put this document into practice and ensure that both the city administration and the capital companies themselves comply with the provisions of it, explains the acting director of the city of Riga. Iveta Zalpētere.
It has already been reported that on April 22, 2020, by the order of the Acting Executive Director of the City of Riga, Iveta Zalpētere, an Advisory Council for the Management of Capital Companies and Capital Shares Owned by the City of Riga was established.
The Council has a number of key tasks. The Council will review, provide opinions and recommendations on the draft strategic documents developed by the Riga City Municipality in the field of capital share management. The council will also provide proposals to the executive director on the management of capital companies and capital shares owned by the Riga City Municipality.
The Council is chaired by Andris Grafs, Vice President and Head of the Baltic Institute of Corporate Governance in Latvia. Edgars Pastars, Legal Adviser of the Financial Sector Association, works in the Council, Latvian Chambers of Commerce and Industry Chairman of the Board Jānis Endziņš, Latvian Employers’ Confederation Līga Menģelsone, General Director, Māris Vainovskis, Head of the Working Group of the Investment Protection and Security Working Group of the Foreign Investors’ Council, and Vladislavs Vesperis, Deputy Head of the Cross-sectoral Coordination Center and Head of the Development Monitoring and Evaluation Division. The Council operates in a public capacity and its members are not remunerated for their work in the Council.
–
