In 2003 the European Commission launched an Action Plan primarily aimed at enhancing corporate
governance within the European Union.
With this in mind, the Board of the Luxembourg Stock Exchange decided to formulate a set of
corporate governance rules for Luxembourg. A “ Corporate Governance ” working group was set
up to draft the general principles of best practice in corporate governance for all Luxembourg
companies listed on the Stock Exchange. The remit of the working group was to draw up a
text that would be in line with international practice and the recommendations of the European
Commission, whilst taking into account the interests of all the stakeholders, i.e. shareholders,
employees and customers.
The Ten Principles and their Recommendations are highly flexible, which allows them to be adapted
to the size, activities and culture of each company. They are based on a “ comply or explain ”
system, which allows companies to deviate from the recommendations when this is justified by
their specific circumstances, provided that adequate explanation is provided.
The monitoring of compliance with the Ten Principles of Corporate Governance relies on the
shareholders and the market authorities, possibly supplemented by other mechanisms.
The Luxembourg Stock Exchange believes that the Ten Principles of Corporate Governance
should be capable of evolving in response to experience gained and to change in legal practices
and business conditions. The Luxembourg Stock Exchange will therefore make every effort to
ensure that follow-up is exemplary.
The Ten Principles of Corporate Governance
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