13 December 2012

EuropeanIssuers: Summary of Commission's European Company Law and Corporate Governance Action Plan

Of key interest to companies are: new non-financial disclosure requirements and mandatory vote on remuneration policy and report; proposals on shareholder identification; voting policies; and possible recommendation on comply/explain.

The Commission's summary of key elements of the action plan is as follows:

1. Increasing the level of transparency between companies and their shareholders in order to improve corporate governance. This will include in particular:

• increasing companies' transparency as regards their board diversity and risk management policies;
• improving corporate governance reporting;
• better identification of shareholders by issuers;
• strengthening transparency rules for institutional investors on their voting and engagement policies.

2. Initiatives aimed at encouraging and facilitating long-term shareholder engagement, such as:

• more transparency on remuneration policies and individual remuneration of directors, as well as a shareholders' right to vote on remuneration policy and the remuneration report;
• better shareholders' oversight on related party transactions, i.e. dealings between the company and its directors or controlling shareholders;
• creating appropriate operational rules for proxy advisors (i.e. firms providing services to shareholders, notably voting advice), especially as regards transparency and conflicts of interests;
• clarification of the 'acting in concert' concept to make shareholder cooperation on corporate governance issues easier;
• investigating whether employee share ownership can be encouraged.

3. Initiatives in the field of company law to support European businesses and encourage their growth and competitiveness:

• further investigation on a possible initiative on the cross-border transfer of seats for companies;
• facilitating cross-border mergers;
• clear EU rules for cross-border divisions;
• follow-up of the European Private Company statute proposal (IP/08/1003) with a view to enhancing cross-border opportunities for SMEs;
• an information campaign on the European Company/European Cooperative Society Statute;
• targeted measures on groups of companies, i.e. recognition of the concept of the interest of the group and more transparency regarding the group structure.

Press release

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