Since its establishment in 1999, theNational Securities Commission of Georgia (NSCG) has beensuccessful in reducing the volume and number of tradestaking place outside the stock exchange. It has also takenimportant steps to increase transparency and disclosure.However, the assessment highlighted a series of weaknessesin Georgia's corporate governance regime and practices.Combined efforts are needed to strengthen shareholdersrights, protect minority shareholders, improve disclosureand transparency, treat stakeholders fairly, and ensure thatmanaging directors and supervisory board members abide bytheir duties and responsibilities. The reform program shouldinclude a component to strengthen the capacity of the NSCG,including its budget, human resources, skills, and powers ofintervention. It is recommended that the NSCG establish awebsite to make information on publicly traded companieseasily available. Efforts should also be made to strengthenthe enterprise registers which hold important documents suchas company charters. Such information should also becentralized and available online. It is necessary tostrengthen the accounting and auditing profession to ensurethe development of reliable audited financial reports. It isrecommended to initiate a series of measures to increase theownership of Georgia's corporate governance rules andregulations by issuers. One means of fulfilling thisobjective is through the preparation of a voluntary nationalcode of best practice in corporate governance. Complementingthis approach, an institute of directors should be set up totrain corporate directors and disseminate best practice inboard procedures.
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