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24 May 2005
On April 7 2005 the Stockholm Stock Exchange announced its decision to incorporate the Corporate Governance Code into the Stockholm Exchange's listing requirements (ie, the requirements that a company must meet to be listed at the Stockholm Exchange). The decision had been negotiated with the Swedish Association of Exchange Listed Companies.
Initially, the code must be applied by all Swedish companies on the A List and all Swedish companies on the O List with a market capitalization exceeding Skr3 billion. These companies must apply the code as soon as possible after July 1 2005 and must have fully implemented it before the annual general meetings in 2006. The code can be assumed to apply to all companies listed on the Stockholm Exchange within a couple of years.
Foreign companies on the Stockholm Exchange's A List and O List shall apply the code applicable in their home countries. If no such code exists, foreign companies shall apply the Swedish code.
Like most similar foreign codes, the Swedish code is based on the principle of 'comply or explain' (ie, companies applying the code must either follow its rules or explain any material deviations). Such deviations and their reasons must be stated in a written corporate governance report to be attached to the company's annual report. A company applying the code must also provide current information on the state of corporate governance in the company on its website.
A first draft version of the code was presented in early 2004 (for further details please see "Corporate Governance Code Proposed"). The draft code was then circulated for comments. When the official period for submitting comments ended on September 30 2004, a total of 78 responses had been submitted to the Ministry of Justice. The government appointed a committee to make the revisions that it deemed appropriate. Having taken into consideration the views expressed in the responses and in the public debate, the committee published its report and the final code on December 16 2004.
The code is not as detailed as the previous draft version. Many provisions overlapping with the Swedish Companies Act or merely stating the obvious were deleted. Material changes as compared with the draft version include the following:
The administration of the code will be handled by an as-yet unnamed body consisting of business representatives and, most likely, a representative of the government.
For further information on this topic please contact Klaes Edhall or Urban Båvestam at Mannheimer Swartling
by telephone (+46 8 505 76 500) or by fax (+46 8 505 76 501) or by email (firstname.lastname@example.org or email@example.com).
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