MFSA published a feedback statement following the consultation on a comprehensive and enforceable cross-sectoral corporate governance framework for the MFSA-authorized entities and the listed companies. MFSA received several responses on the consultation from a wide range of industry participants and interested parties and carefully considered the feedback received. The majority of stakeholders appreciated that good corporate governance is crucial and that the review will benefit the financial services industry and the jurisdiction in general. However, respondents raised a number of concerns and put forward several views and recommendations in relation to the proposed framework.
With the consultation document on corporate governance framework, MFSA had set out several proposals to promulgate a comprehensive principles-based, cross-sectoral Corporate Governance Code, supplemented by sector-specific MFSA rules and complementing guidelines or sectoral codes. In determining its positions, as set out in the feedback statement, MFSA has focused on raising corporate governance standards for authorized persons, ensuring that governance is considered a top priority and embedded in firms’ culture by the governing body and senior management. Furthermore, MFSA is mindful of the potential impact of the proposed Code on various types of entities falling within the scope of the framework and ensured that a “one-size-fits-all” approach is avoided, while ensuring that the overall governance standards increase.
In this respect, MFSA will be issuing a list of principles of good corporate governance applicable to all authorized persons on a “best effort basis.” The main principles will be supplemented by supporting provisions, which will act as guidance for achieving the main principles. The principles will also be supported by sector-specific complementing guidance notes and/or updates to the governance section of the MFSA Rulebooks (as applicable) and/or sectoral codes. In determining whether any of the requirements are to be included in the relevant Rulebooks or else by guidance notes or Codes, MFSA will take note of various criteria, including the existing provisions in various frameworks and the risk classification of entities, as determined by MFSA. In line with the commitment of MFSA to enhance engagement with its stakeholders, the Code of Principles may, in due course, be the subject of another industry consultation exercise. This would allow stakeholders to comment, make suggestions, and submit contributions to the draft Code.
Keywords: Europe, Malta, Banking, Insurance, Corporate Governance, Governance, ESG, Governance Framework, Rulebook, MFSA
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