ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Suren Sloyan, HAP
• monitors the implementation of the recom - mendations of the company’s external audi - tor; and • develops policies on the company’s internal control system and monitors their implemen - tation. The company’s charter or internal legal acts may provide the audit committee with other powers. 7.2 Requirements for Directors Concerning Management Risk and Internal Controls Directors have to act in the company’s best interests and exercise their rights and duties in good faith and with reasonable care, while avoid - ing actual or potential conflicts of interest. This fiduciary duty encompasses the responsibility for overseeing risk management and internal controls within the company. To promote effec - tive corporate governance, the Armenian gov - ernment introduced the Corporate Governance Code in 2010, which was updated in 2024. The Corporate Governance Code provides principles and guidelines aimed at enhancing management efficiency, protecting shareholder rights and increasing transparency and accountability.
Incorporating the Corporate Governance Code into company practices can bolster investor con - fidence, reduce risks and contribute to sustain - able economic growth. By aligning with interna - tional best practices, Armenian companies can enhance their governance frameworks, thereby supporting long-term success and stability. In summary, while Armenian law mandates directors to act diligently and in the company’s best interests, the Corporate Governance Code offers a structured approach to managing risk and internal controls, encouraging companies to adopt comprehensive governance practices.
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