News

Taking into account the decision by the Latvian bank regulator to suspend the provision of financial services at that the Baltic International Bank (BIB) and the assessment that it has serious internal governance deficiencies, Baltic Institute of Corporate Governance (BICG) has expelled the bank as a corporate member.

The respective decision was made by the Board of the BICG on Tuesday.

It was made in line with the Statutes of the BICG, which note that, among other reasons, a member may be expelled if their activities are deemed to be in disagreement with the activities of the association and/or damage the reputation of the association.

All members of the BICG are subject to the Code of Ethics, which calls for integrity, transparency and accountability.

Contacts:

Andris Grafs
Vice President Latvia
Mob. +371 297 84407
E-mail andris[at]bicg.eu

On December 6^th, the Board of the Baltic Institute of Corporate Governance (BICG) elected a new Chair of the Board.

Kārlis Danēvičs is a Management Board member of SEB in Latvia.

He also serves as the Head of Lending Committee at the Finance Latvia Association, Chair of the Supervisory Board at the SOS Children’s Villages Latvia and a Senate member of SOS Children’s Villages International operating in over 130 countries.

“I believe that perhaps the most important precondition for Baltic countries to become as wealthy and prosperous as Scandinavian countries is good corporate governance. Decisions should be made and companies should be steered by willingness to create value, build and expand businesses. And businesses should be run and governed by maximizing long-term value for stakeholders and not by cutting corners, gaining at the expense of others or even by dishonest and reckless actions oriented towards short-term gains. I am proud to become the Chair of the Board at the BICG, as it has long been leading the change towards good corporate governance practices in the Baltics through education, business networking and advocacy work, with measurable and positive impact”, says Mr Danēvičs.

He is taking over from Lina Kapčinskienė, Managing Director and Chair of the Management Board at Baltic Agro Machinery, who has stepped down after serving as the Chair of the Board since 2020, and now remains a member of the Board.

Equally representing Latvian, Lithuanian and Estonian members, Board of the BICG is appointed at the Annual General Meeting, and establishes the strategies, goals and business procedures for the association.

Chair of the Board is elected by the Board members themselves.

More information about all of the Board members of the BICG can be viewed here.

BICG is the competence centre for creating well-governed businesses and stronger economies in the Baltics. It is an association working to ensure that private and state-owned companies are governed competently, transparently, with a high standard of accountability and are successful long-term. It is achieved through policy advocacy, best practice recommendations, education programs and other initiatives.

Baltic Institute of Corporate Governance (BICG) invites to attend the Board member education program in the year 2023.

The program is designed to introduce business owners, Board and Supervisory Council members as well as top executives to the best principles of corporate governance, providing a strong basis for their implementation in practice.

“It offers an opportunity to learn about the best practices in separating and fulfilling their particular responsibilities, to ensure long-term success of a company,” says Rytis Ambrazevičius, President of the BICG.

Topics of the education program are compiled based on the principles and recommendations on corporate governance by the International Finance Corporation of the World Bank Group (IFC) and Organization for Economic Co-operation and Development (OECD).

Education is held in the English language, it consists of three parts (two days each, six in total) and final examination.

Three separate sessions will be held in 2023.

First group:
• March 2^nd and 3^rd – first part in Vilnius, Lithuania;
• March 16^th and 17^th – second part in Tallinn, Estonia;
• March 30^th and 31^st – third part in Riga, Latvia.

Second group:
• May 11^th and 12^th – first part in Vilnius, Lithuania;
• May 18^th and 19^th – second part in Tallinn, Estonia;
• June 1^st and 2^nd – third part in Riga, Latvia.

Third group:
• September 28^th and 29^th – first part in Vilnius, Lithuania;
• October 5^th and 6^th – second part in Tallinn, Estonia;
• October 12^th and 13^th – third part in Riga, Latvia.

For the full introduction to the program, please see >>

INTRODUCTION (EN)

Please note that the number of places in the program is limited and priority is given to participants who are directly involved in planning and implementing good corporate governance practices in a company.

For more information, please contact:

Rytis Ambrazevičius
President
Mob. +370 698 17011
E-mail rytis[at]bicg.eu

Andris Grafs
Vice President Latvia
Mob. +371 297 84407
E-mail andris[at]bicg.eu

Erik Sakkov
Country Manager Estonia
Mob. +372 502 1638
E-mail erik[at]bicg.eu

Last week, autumn session of the Board member education by the Baltic Institute of Corporate Governance (BICG) ended with the 1000^th graduate completing the course.

“For over a decade now BICG has been breaking new grounds and leading the way in corporate governance advancement in the Baltics. While it continues to this day, now we can also look back at a great legacy, including having over a thousand good corporate governance ambassadors, who are at the forefront of the change towards more transparency and effectiveness in the Baltic business practices”, says Rytis Ambrazevičius, President of the BICG.

The 1000^th graduation certificate was awarded to Ms Laura Blaževičiūtė, CEO at All Media Lithuania and Chair of the Board at the association encouraging women’s leadership in business Lyderė.

“I am proud to be the 1000^th graduate of the program. This number signals a vital mindset change among business leaders in the Baltic countries, with corporate fairness, transparency and accountability becoming important drivers of long-term value creation not only for companies but for societies and environment we operate in. Becoming a part of this change was my key motivation to join the program. And I have enjoyed it very much. It was highly professional, extensive and practical”, says Ms Blaževičiūtė.

Participants from Lithuania, Latvia, Estonia as well as Sweden, Finland, Ukraine and elsewhere have graduated the course since it was first held in 2009.

Mr Andris Teikmanis, Head of the Chancery of the President of Latvia, joined the graduation last week, emphasising the importance of good corporate governance as a key tool for developing resilience and ensuring a better future in Baltic businesses.

BICG is the competence center for creating well-governed businesses and stronger economies in the Baltics, working to ensure that private and state-controlled companies are governed competently, transparently, with a high standard of accountability and are successful long-term. It is achieved through policy advocacy, best practice recommendations, education programs and other initiatives.

BICG holds Board member, Chair and Corporate Secretary education programs.

Today, Baltic Institute of Corporate Governance (BICG) and professional services company EY unveiled the first guidelines for Baltic Boards outlining good practices for effectively engaging with environmental, social and governance (ESG) factors in business.

“ESG is the area that is not only increasingly regulated but also increasingly full of opportunities to find new competitive strenghts and create long-term growth of a company. Leadership in taking an integrated approach to it should come from the Boards, as they are in charge of company strategy. While information on ESG is currently abundant, practical guidance for Boards in the Baltics and elsewhere is lacking. The new guidelines aim to provide an understanding of what ESG is, why it is important, and how to engage with it on a very practical basis”, says Rytis Ambrazevičius, President of the BICG.

ESG Guidelines for Baltic Boards – What, Why, and How

A shift towards more sustainable business practices requires a significant involvement by the Boards in many areas, including reassessing company purpose, integrating ESG considerations into business strategies and monitoring them along the way, re-aligning company culture, etc.

Providing a practical step-by-step guidance for the process, the new guidelines encourage both Boards and companies to consider moving beyond tolerating minimum performance against consensus ESG benchmarks and to accelerate towards best-in-class ESG policies, identifying opportunities with unique worth of doing things differently.

While the new guide was created with the aim to promote change in the Estonian, Latvian and Lithuanian companies, it offers largely universal principles applicable in other companies beyond the Baltics.

Contacts:

LT: Rytis Ambrazevičius
President
Mob. +370 698 17011
E-mail: rytis[at]bicg.eu

LV: Andris Grafs
Vice President Latvia
Mob. +371 297 84407
E-mail: andris[at]bicg.eu

EE: Erik Sakkov
Country Manager Estonia
Mob. +372 502 1638
E-mail: erik[at]bicg.eu

Taking into account the questionable practices and results of appointing the new CEO and other Management Board members at the Latvian State Forests (LSF), Baltic Institute of Corporate Governance (BICG) has decided to expel the company as a corporate member.

The respective decision was made by the BICG Board on Thursday.

Two individual members of the BICG, who are serving on the company’s Supervisory Board and held decision-making positions in the process, were also expelled.

Having participated in the Nomination Committee established by the Supervisory Board of LSF for the selection of the new CEO and the rest of the Management Board, BICG has already publicly raised questions if an appropriate process was conducted.

Among issues related to the appointment and noted by the BICG Board were whether a selected candidate is complying with crucial requirements for the position.

Given concerns already publicly expressed about the process, Prime Minister of Latvia has tasked the Cross-Sectoral Coordination Centre to assess the practices used in the nomination processes, including a selection of new management at LSF.

At the same time, BICG is inviting to start broader public consultations for improving the nomination process of Management and Supervisory Board members in the Baltic state-controlled companies, including the possibility for independent members to have collective veto rights as well as legal rights to publicly comment on the selection process, updating the approach to defining qualification requirements for candidates, competence and role of headhunters, etc.

All members of the BICG are subject to the Code of Ethics, which calls for integrity, transparency and accountability.

Contacts:

Andris Grafs
Vice President Latvia
Mob. +371 297 84407
E-mail andris[at]bicg.eu

Baltic Institute of Corporate Governance (BICG) invites to attend the program for corporate secretaries, to be held in Riga on October 27^th & 28^th.

Highly practical, two-day program offers insight into the varied role and duties of a corporate secretary in ensuring excellence in Board work and improving overall corporate governance practices in a company.

“The role of a corporate secretary as an assistant and advisor to the Board as well as an advocate for good corporate governance in the company is increasingly relevant in the Baltics, and it is necessary to make sure that everyone tasked with fulfilling these duties has the relevant knowledge and awareness of the best practices,” says Rytis Ambrazevičius, President of the BICG.

The course is based on the good corporate governance practice framework as well as practical advice by experienced corporate secretaries and Board professionals.

For full information about the program and profile of an ideal participant, please see:

INVITATION (EN)

Applications are now open until the 19^th of June, and you can find the respective form both through the invitation and here. Please note that registration is dependent on the approval of the BICG. The cost of participation is 750 EUR (and VAT).

For more information, please contact:

Rytis Ambrazevičius
President
Mob. +370 698 17011
E-mail rytis[at]bicg.eu

Andris Grafs
Vice President Latvia
Mob. +371 297 84407
E-mail andris[at]bicg.eu

Erik Sakkov
Country Manager Estonia
Mob. +372 502 1638
E-mail erik[at]bicg.eu

Held on April 22^nd, the Annual Corporate Governance Conference by the Baltic Institute of Corporate Governance (BICG) focused on ‘Black Swans in the Boardroom’ this year, as multiple disruptive events that might have previously been thought to happen once a decade are now happening simultaneously and all businesses have to learn and adapt with both foresight and agility.

“Being in charge of the strategic direction and the very survival of companies, Boards bear the main responsibility for dealing with all major disruptions by understanding their long-term impact and helping the management in navigating it short-term”, says Rytis Ambrazevičius, President of the BICG.

Some of the recent black swans in the Baltics and elsewhere discussed during the conference include geopolitical issues, breakdown in supply chains, skyrocketing cost of energy, ongoing pandemic and various other transformation processes, including push for sustainability.

Full recording & program of the conference is now available here.

On April 22^nd, Baltic Institute of Corporate Governance (BICG) held the Annual General Meeting (AGM) 2022 in Vilnius.

Members approved the annual activity and audited financial reports, and the overall Annual Report 2021 is now available online here.

“For the first time ever, the total number of our members has exceeded 300 and continues to increase. With the strengthening of operations in Estonia, three sessions of the Board member education program were held for the first time in one year as well, compared to the usual two. We have also returned to Stockholm for our Chair education program, which remains the only program dedicated to ensuring effective Board leadership in the region. At the same time, we continue to share our knowledge with the civil servants free-of-charge and to lead in policy advocacy, encouraging improvements in Baltic legislation”, says Rytis Ambrazevičius, President of the BICG.

Board elections were held as well, with Lina Kapčinskienė, Chair of the Management Board at Baltic Agro Machinery UAB, and Daiva Rakauskaitė, Partner at Business angels fund I LLP, being re-elected for their second tenures of 3 years, while Vita Balode-Andrews, CFO at Latvian Railway JSC, and Kati Kusmin, CEO of Riigi Kinnisvara AS, are joining as new members of the Board.

New members are stepping in as Guntars Baļčūns, CFO at Latvenergo AS, and Riina Käi, CFO at Elering AS, have stepped down after having completed two tenures each.

“I want to thank Guntars and Riina for their time, insight and overall guidance in the last six years, during which the number of our members and graduates has doubled, education programs received attention across Europe and our voice in policy advocacy contributed to many positive changes in the governance legislation in the Baltics. At the same time, I want to welcome Vita and Kati, who are both set to bring their own perspective and ideas”, says Rytis Ambrazevičius.

The AGM has also re-elected the Nomination Committee, with Aiga Ārste-Avotiņa, Managing Partner at Amrop Latvia; Nijolė Kelpšaitė, Managing Partner at J. Friisberg & Partners Lithuania; and Marja-Liisa Soone, Senior Legal Counsel at Bolt, set to continue their work for another 1-year tenure.

More information about the BICG leadership can be found online here.

Members have also approved the updated version of the Statutes of the BICG, with amendments including an improved division of responsibilities between various bodies (e.g. governance functions more clearly assigned to the Board, management functions – to the President), inclusion of the Ethics Code as a key document of the Association, etc. The new version of the Statutes will come into effect after formal registration with the Centre of Registers in Lithuania.

We thank our corporate member Swedbank for hosting us.

Baltic Institute of Corporate Governance (BICG), together with the European Confederation of Directors’ Associations (ecoDa), is calling on all Baltic and other European Board members to question their mandates in Russian and Belarusian companies. European Board members should also reconsider their investment strategies as well as the operational processes in Russia and Belarus and in doing so check back with investors and owners in respect of such strategic moves. Businesses cannot be conducted as usual when the war in Ukraine violates international rules.

“We are confident that European Board members will rise to the occasion and question their mandates in Russian and Belarusian companies. Board members should feel a stronger moral duty to uphold the fundamental European values of freedom and democracy. Of course, it must be up to the individual director to decide, taking into consideration the situation of each company”, says Leena Linnainmaa, Chair of ecoDa.

Many European companies have already chosen to align their strategies with the unanimously agreed sanctions taken by the European Union, and ecoDa welcomes the strong signal given by those major companies.

“In this exceptional context of war, Board members must demonstrate responsibility – just as they have done during the Covid crisis. However, the stakes today are of a completely different dimension – and have profound implications for the sustainability of peace, democracy and economy in Europe”, underlines Michel de Fabiani, Chair of ecoDa’s Advocacy and Policy Committee.

Full statement can be viewed here.

Contacts:

Rytis Ambrazevičius
President
Mob. +370 698 17011
E-mail: rytis[at]bicg.eu

Andris Grafs
Vice President Latvia
Mob. +371 297 84407
E-mail: andris[at]bicg.eu

Erik Sakkov
Country Manager Estonia
Mob. +372 502 1638
E-mail: erik[at]bicg.eu

Baltic Institute of Corporate Governance (BICG) invites companies to register for an assessment of their corporate governance practices, which allows to identify their strengths, weaknesses and develop comprehensive plans for improvement.

Depending on company type (listed, state-owned or unlisted/closely held), all assessments by the BICG are based upon 3 internationally recognised benchmarks: G20/OECD Principles of Corporate Governance, OECD Guidelines on Corporate Governance of State-Owned Enterprises and ecoDa Corporate Governance Guidance and Principles for Unlisted Companies in Europe.

Five corporate governance categories with the total of 58 indicators are evaluated during the assessments: shareholder protection and rights; Board of directors; transparency and reporting; control environment and stakeholders. All findings and respective recommendations are then provided in a detailed report for the company.

As the number of assessments that can be carried out each year is very limited, to provide equal opportunity for all businesses the BICG invites companies that might want to start their own evaluation this year to register their interest by the 15^th of March.

Testimonials from Latvia, Lithuania and Estonia

“Latvenergo has been working persistently on improving its corporate governance. We saw the BICG proposed assessment as an excellent tool to identify additional activities so that we are in line with international best corporate governance practice. The assessment provided valuable findings and allowed us to broaden our horizons. As a result, we formalised some of our already established practices, introduced new ones, in some areas reviewed the distribution of responsibility among governance bodies, and extended the scope of publicly disclosed information. We strongly believe that all of this has made our company better governed and more attractive to investors and other stakeholders!”, Latvenergo, leading energy supplier in the Baltics.

“The main result of the BICG assessment was an amendment of the management structure of the company under recommendations issued by the BICG, i.e., the company changed to a one-tier Board structure instead of a two-tier structure, with the independent Board taking over the functions of the previous Supervisory Council. These changes simplified and made the management structure of the company more transparent and more efficient”, AUGA group, organic food company listed on Nasdaq stock exchange.

“Operail’s intention is to pursue best management and corporate governance practises. Company wanted a professional evaluation and got a comprehensive assessment of its corporate governance practises’ strengths, weaknesses and improvement plan. In long term, the enhanced management practises and increased transparency will translate into improved effectiveness, competitiveness and sustainable value creation”, Operail, international group of railway logistics companies.

Assessment fee varies from 5.000 to 10.000 EUR (and VAT), depending on the size of the company.

For more information, please see here:

Contacts:

Rytis Ambrazevičius
President
Mob. +370 698 17011
E-mail: rytis[at]bicg.eu

Andris Grafs
Vice President Latvia
Mob. +371 297 84407
E-mail: andris[at]bicg.eu

Erik Sakkov
Country Manager Estonia
Mob. +372 502 1638
E-mail: erik[at]bicg.eu