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Study of Corporate Governance Practices of US-Listed Israeli Companies

White & Case

White & Case llp recently completed a study of the exemptions that Israeli companies take
from the corporate governance requirements that apply to US domestic issuers. In total, we
reviewed filings by the 65 Israeli companies listed on the Nasdaq Stock Market and the three
Israeli companies listed on the New York Stock Exchange (NYSE.)1 We believe that this study
will assist listed Israeli companies and those conducting IPOs in determining the appropriate
governance practices to adopt.
We believe that the results of this study are of interest for the following reasons:
* After Canada (whose companies benefit from a special US Securities and Exchange Commission
(SEC) registration and reporting regime), Israel is the foreign country with the largest number of
companies listed in the United States. Although the number of UK listings by Israeli companies
has grown recently, the United States continues to be the destination of choice for Israeli
companies conducting IPOs.
* Almost all Israeli companies that are publicly traded in the United States are listed on Nasdaq.
Nasdaq amended its rules in January 2005 to provide that foreign private issuers can receive an
automatic exemption from its corporate governance requirements that apply to US companies,
provided that the foreign company discloses the particular exemption in its annual report or on
its website.
* Most Israeli companies are listed only in the United States. Those companies also listed on a
non-US securities exchange are generally listed on the Tel Aviv Stock Exchange. Since the US
listing represents the substantial majority of trading and US shareholders represent the majority
of shareholders, the application of US corporate governance requirements is of particular interest.

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