The story of the Code

Here we present the story of the birth and development Swedish Corporate Governance Code up to the currently applicable version. See also some debate articles and presentations.

The origin of the code

The original code was created through a collaboration between the National Commission on Business Confidence and a number of corporate sector organisations. Under the direction of Erik Åsbrink, who was then chair of the National Commission, a Code Group was formed. It consisted of three members of the National Commission on Business Confidence and six people from the business community. 

First proposal

In April 2004, the Code Group presented a first proposal for the Swedish Code of Corporate Governance1. At the same time, the National Commission also presented a report2.
The Code Group's proposal was then submitted to open referral, where anyone who so desired had the opportunity to comment. The proposal was also the subject of public debate in the media and seminars and conferences of various kinds.

Introduction of the original code

Following comments and other opinions that emerged from the debate, the Code Group prepared the final version of the Code, which was presented in December 20043. At the same time, the Code Group also published a report which presented submitted comments and the reasoning behind the Group's positions and responses4.

The code was introduced into the Stockholm Stock Exchange listing requirements from July 1, 2005 for all companies listed on the stock exchange's A list and for companies on the O list with a market value in excess of SEK 3 billion, a total of over 70 companies. In the following years, the number of "code companies" increased and totalled 115 at the end of 2007.

Board Instructions

In the following years, a number of modifications were made to the Code, partly as a result of new legislation and partly to correct certain problems that arose in the Code’s practical application. These were made in the form of Board Instructions regarding the Code. During the lifetime of the original Code's, a total of five Instructions (in 2005, 2006 (three Instructions) and 2007) were issued.

Revised Code is introduced for all listed companies

In the autumn of 2007, which was the third year that the Code companies were to report on their application of the Code at the end of the year, the Corporate Governance Board decided to push for the Code to be applicable to all listed companies. There were three main reasons for this:

  • Good corporate governance was considered just as important for smaller listed companies as for large ones.

  • The Code could then be a genuine alternative to legislation (unlike a code that only applies to the largest companies, especially with regard to implementing EU directives).

  • Sweden would then be in line with other EU countries, where national corporate governance codes normally apply to all listed companies.

At the same time, the Board decided to carry out a major review of the Code in order to rectify weaknesses and problems that had emerged during its practical application by companies, and also to adapt it to the circumstances of smaller listed companies. On February 1, 2008, the Board presented a proposal for a Revised Code. After an open referral process and discussions and debate in the media and elsewhere, the Board finalised Revised Code in early May.

On July 1, 2008, this version of the Code came into force for all Swedish companies with shares traded on the Swedish regulated market, i.e. NASDAQ OMX Stockholm and NGM Equity. To supplement this version of the Code, Board Instruction 1 - 2009 was issued in 2009. 

Revised Code 2010 is introduced

A proposal for Revised Code was published on October 27, 2009 and was for consultation until November 20. More than 15 comments were received.

The changes to the code were based on

  • the recommendation on remuneration to senior executives in listed companies published by the European Commission in spring 20095,

  • new legislation to implement amendments to the fourth and seventh company directives6,

  • new legislation to implementation of the eighth company directive7, and

  • Nasdaq OMX Stockholm's provisions in its "Rules for Issuers" on the removal of requirements regarding independence of board members.

The revised code came into force on February 1, 2010, but with transitional rules that meant that some of the changes did not need be applied until later.

Board Instructions issued for the 2010 code

The Corporate Governance Board issued four Instructions for the 2010 Code.

Proposal for Revised Code 2015

The Board submitted a proposal for revised code 2015 for open referral until September 1, 2015. Following the consultation process, Revised Code 2015 was published on October 1, 2015. It came into force on November 1, 2015.

Board Instructions issued for the 2015 code

The Corporate Governance Board issued three Instructions for the 2015 Code.

Revised code 2016 is introduced 

In 2013, the College began extensive work to amend and update the Code, which resulted in the revised Swedish Corporate Governance Code, which came into force on 1 November 2015.

The work on the revision of the Code continued in 2016. Due to the implementation of the Directive into Swedish law and the regulation on auditors and auditing, the directive on non-financial information and more and the market abuse regulation, the Board issued three Instructions in 2016. These Instructions were implemented into the Revised Code which entered came force on December 1, 2016.

Revised Code 2020 is introduced

In 2018 and 2019 the Board conducted roundtables with Code users in order to identify any need for rule changes. The overall conclusion from these dialogues was that the Code works well in general and that no major changes are required, but that there are reasons to review some of the details within the Code. The Board submitted a proposal for revised code 2020 for open referral until 6 November 2019. Following the consultation process,  Revised Code 2020 was published on 29 November 2019. It came into force on January 1, 2020.  Code Instruction 1-2020 (changes due to the implementation of the new Rules on Remuneration of the Board and Executive Management and on Incentive Programmes) came into force on January 1, 2021.

[1] Swedish Code of Corporate Governance – proposal from the Code Group.
SOU 2004:46.
[2] Trust and the Corporate Sector – Report by the National Commission on Business Confidence. SOU 2004:47. Chapters 58 describe the background to the National Commission's involvement in the development of the Swedish Code.
[3] Swedish Code of Corporate Governance – applicable from July 1, 2005.
[4] Swedish Code of Corporate Governance – Report by the Code Group.
SOU 2004:30
[5] 2009/3177/EC
[6] Chapter 6, Sections 69 of the Annual Accounts Act  (1995:1554) and Chapter 9, Section 31, third paragraph of the Companies Act (2005:551)
[7] Chapter 8, Sections 49a and 49b of the Companies Act (2005:551)