Requirements of Independence. Independent Member.
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Requirements of Independence. Independent Member.

Requirements of Independence. Independent Member. This article is from the Corporate Governance Recommendations prepared on the basis of Estonian legislation, structure of shareholders of Issuers acting in Estonia and taking into account the main problems that arise in company management.
Requirements of Independence. Independent Member.
These Corporate Governance Recommendations are to be carried out primarily by companies whose shares have been admitted to trading on a regulated market operating in Estonia ("Issuers"), except for investment funds registered as public limited companies.

Other companies may also choose to comply with these Corporate Governance Recommendations and shareholders and partners of such companies are encouraged to follow these principles upon organizing their management and management control of the company.

Independent is the member of the Supervisory Board, who:

  1. is not a member of the Supervisory Board, the Management Board or management of the Issuer, controlling shareholder of the Issuer, company belonging to Issuer’s group or company controlled by the Issuer and who has not been in such a position for the previous three (3) years;
  2. in not an employee of the Issuer, controlling shareholder of the Issuer, a company belonging to the Issuer’s group or a company controlled by the Issuer;
  3. does not receive significant additional remuneration from the Issuer, a controlling shareholder of the Issuer, a company belonging to the Issuer’s group or a company controlled by the Issuer except remuneration paid as remuneration of member of the Supervisory Board;
  4. has not represented directly or indirectly the controlling shareholder;
  5. not to have, or have had within the last year a significant business relationship with the Issuer or through a company controlled by them, a controlling shareholder of the Issuer, a company belonging to the Issuer’s group or a company controlled by the Issuer. Business relationships include a significant acquisition, use or transfer of goods or services (including financial, legal, advisory or consulting services) for direct or indirect monetary reciprocity;
  6. not to be or have been the auditor, external auditor, auditor in charge or an employee of the auditing company of the Issuer, a controlling shareholder of the Issuer, a company belonging to the Issuer’s group or a company controlled by the Issuer during the last three (3) years;
  7. is not a member of the Management Board or person belonging to management in a company in which the member of the Management Board or a person belonging to management of the Issuer, a controlling shareholder of the Issuer, a company belonging to Issuer’s group or a company controlled by the Issuer acts as a member of the Supervisory Board and does not have significant links with members of the Management Board of the Issuer through other companies or persons;
  8. has not been an independent member of the Supervisory Board for more than ten (10) years;
  9. is not a person close to a member of the Management Board or a person belonging to management of the Issuer, a controlling shareholder of the Issuer, a company belonging to Issuer’s group or a company controlled by the Issuer or a person close to persons specified in clauses (1)-(6).


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