The reasons for the revision are changes in laws and regulations, international development and experience with the use of the Code of Practice. A number of the changes aim at simplifying the Code of Practice. Other changes include the following:
- Emphasis of the board of directors’ responsibility for defining objectives, strategies and risk profile, and for ensuring that these support value creation for shareholders.
- Expansion of the board of director’s responsibility with respect to the company’s capital structure and corporate responsibility.
- Replacement of the former recommendations regarding only one class of shares and no restrictions on negotiability with a recommendation not to have any restrictions on share ownership, trading or voting.
- Specification in the commentary text that the objective of the recommendation on nomination committees means that companies without a nomination committee should also describe their nomination processes.
- Removal of most of the recommendations and commentary text regarding the composition of corporate assemblies.
- New recommendation regarding the interests of board members and senior executives in matters to be considered by the board.
- Clarification in the commentary text that the company should not grant share options to board members.
- Rewording of the recommendations regarding the auditor such that they explicitly address the board as well as the audit committee insofar as appropriate.
Click here to read the new Code of Practice. See here for a document that shows the changes from the 2014 version of the Code.