Gap Analysis of OECD Principles of Corporate Governance, OECD Guidelines 
           on Corporate Governance of State-Owned Enterprises, Armenian legislation  
                                            and  
                              Draft Corporate Governance Code 
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                         (to be presented and discussed at the Working Group on October 30, 2009) 
                                               
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                      Notes: 
                           1.   The first column of this table is a list of those OECD principles which, in the consultants’ opinion, are not currently reflected in Armenian legislation. As such, it is 
                                largely based on the analysis of corporate governance legislation prepared for EBRD in 2007 (http://www.ebrd.com/country/sector/law/corpgov/assess/armenia.pdf), 
                                revised to take into account legislative amendments since then. Numbers refer to the relevant paragraph in that assessment. 
                           2.   Unnumbered sections are based on the OECD Guidelines on Corporate Governance of State-owned Enterprises. 
                           3.   It should be noted that not all the suggested measures are suitable for inclusion in a corporate governance code. Some may involve legislative amendments, or policy 
                                decisions by government.  
                           4.   The second column (‘background’) sets out relevant legal provisions, if any, plus comments received from the listed companies sub-committee (‘LCSC’). 
                           5.   The third column refers to principles of the FSDP code (USAID Financial Sector Deepening Project’s draft code for banks), whilst the fourth column (‘comments’) 
                                identifies the need to draft a provision in a corporate governance code, and refers to the skeleton code and the project’s Concept Paper (both of which have been 
                                previously submitted to the Working Group). 
                           6.   Abbreviations used are: 
                                     AGM:            Annual General Meeting 
                                     CBA:            Central Bank of Armenia 
                                     CEO:            Chief Executive Officer 
                                     CG:             corporate governance 
                                     FSDP:           USAID Financial Sector Deepening Project 
                                     GSM, GM:   General (Shareholders) Meeting 
                                     IAS:            International Accounting Standards 
                                     IFRS:           International Financial Reporting Standards 
                                     LBBA:           Law on Banks and Banking Activities 
                                     LCSC:           Listed companies sub-committee 
                                     LJSC:           Law on Joint Stock Companies 
                                     LSMR:           Law on Security Market Regulation 
                                     SOEs:           State Owned Enterprises 
                           7.   Rows highlighted in yellow are those whose provisions should be considered for inclusion in the Code. 
                           8.   Rows highlighted in red and in bold are those considered key priorities 
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                       Gap Analysis with some issues of the 
                                          
                    OECD Principles of Corporate Governance 
         
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         BOARD OF DIRECTORS: 
          
         OECD Principle VI.A: Board members should act on a fully informed basis, in good faith, with due diligence and care, and in the best interest of the company and the 
         shareholders 
         OECD Principle VI.B.1: The board should fulfil certain key functions, including reviewing and guiding corporate strategy, major plans of action, risk policy, annual 
         budgets and business plans; setting performance objectives; monitoring implementation and corporate performance; and overseeing major capital expenditures, 
         acquisitions and divestitures 
         OECD Principle VI.B.3: The board should fulfil certain key functions, including reviewing key executive and board remuneration, and ensuring a formal and 
         transparent board nomination process 
         OECD Principle VI.B.5: The board should fulfil certain key functions, including ensuring the integrity of the corporation’s accounting and financial reporting systems, 
         including the independent audit, and that appropriate systems of control are in place, in particular, systems for monitoring risk, financial control, and compliance with 
         the law 
         OECD Principle VI.B.6: The board should fulfil certain key functions, including monitoring the effectiveness of the governance practices under which it operates and 
         making changes as needed 
         OECD Principle VI.B.7: The board should fulfil certain key functions, including overseeing the process of disclosure and communications 
         OECD Principle VI.C.1: Boards should consider assigning a sufficient number of non-executive board members capable of exercising independent judgement to tasks 
         where there is a potential for conflict of interest.  Examples of such key responsibilities are financial reporting, nomination of executive, board and auditors’ 
         remuneration 
         OECD Principle VI.C.2: Board members should devote sufficient time to their responsibilities 
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