On 5 August 2022, the Malta Financial Services Authority (the ‘MFSA’) introduced its Corporate Governance Code (the ‘Code’) which applies to all authorised entities falling within the remit of the MFSA’s supervisory powers. The Code seeks to enhance governance structures by guiding board members and practitioners to implement or bolster, on a best-effort basis, governance practices in the best interest of all stakeholders concerned. The Code inter alia emphasises the importance of:
- an effective board which is composed of executive and non-executive independent directors, to periodically conduct board self-assessments and evaluations to ensure board effectiveness;
- internal controls, in order to ensure that boards exercise adequate oversight of executive management and that boards have an adequate understanding of risk;
- stakeholder engagement; and
- corporate culture, and corporate social responsibility.
Given the wide range of entities falling within the scope of the Code, entities are expected to adhere to the Code in a manner that is proportionate to their nature, size and complexity.
Ganado Advocates is training and supporting its clients and contacts to adjust to the new requirements.