Corporate Governance in the Cypriot Capital Market

The paper investigates corporate governance in Cyprus through analyzing the regulatory framework and a large sample of public Cypriot firms. The Corporate Governance Code for listed companies was first introduced in 2002. This Code was subsequently revised in March 2011, September 2012 and January 2019. The Code applies to all listed companies in the Cyprus Stock Exchange, and companies of the non-regulated market are excluded. We attempt to highlight various characteristics of the enforcement of corporate governance rules in the everyday practice of corporations. According to the Cypriot Code of Corporate Governance, at least one third of the directors must be independent and a relevant application must be submitted to the Cyprus Stock Exchange to be granted a reasonable period for compliance. The size and composition of the board of directors should reflect the company’s size and activities. The remuneration of executive and non-executive board members is handled by the remuneration committee. This committee is responsible for the appointment, remuneration and termination of the external auditor. Pursuant to appointment, the committee must ensure the independence and effectiveness of the auditors, particularly when they offer a substantial volume of non-auditing services. Since it is difficult for shareholders to monitor boards or senior management effectively, transparency is essential. This may be achieved with adequate supply of timely and accurate information.