The Green Paper states that companies must demonstrate utmost responsibility not only to shareholders and employees but also towards society at large. However, corporate governance is about the internal dynamics of companies and the responsibility of their different stakeholders. Corporate governance should not be used to implement social and societal policy issues.

With regard to the specific issues raised in the Green Paper, EuropeanIssuers' main comments can be summarised as follows:

• They support the comply or explain system and want to make it work well. They do not, however, support a role for regulators in monitoring individual governance decisions.
• They support a right for companies to identify their shareholders.
• They consider that corporate governance needs to be practical and consistent with the different ways in which companies operate across Europe. It is thus best done at national level, consistent with the national company law structures. They do not therefore support new EU action on Board composition, such as the separation of the roles of CEO and chairman.

• They support disclosure of remuneration but not a mandatory rule on "say on pay".
• They support disclosure of voting policies by investors, in order to assist companies to understand their shareholders’ approach and to ensure greater understanding in advance of any possible areas of disagreement. This would facilitate better dialogue between companies and their investors.
• They believe that a differentiated and proportionate approach for smaller quoted companies should be encouraged.
• They believe that the focus for policymakers should be on making financial markets deliver better outcomes for their end users.

 

Policymakers need to see corporate governance within the context of global competitiveness and the many different disclosure obligations affecting listed companies, which may impact on companies’ decision as to whether to go (or stay) public. At the end of 2010, Europe had already fallen to third place after both the US and Greater China in terms of the number of new global listings.

The focus for policymakers should thus be on making financial markets deliver better outcomes for their end users, including listed companies, on the implementation of existing Directives before proposing new ones, and on facilitating dialogue between companies and shareholders.

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