EuropeanIssuers: Highlights of Presidency Conference on Corporate Governance

30 November 2011

The Polish Presidency organised on 14-16 November the Presidency Conference on Corporate Governance. The main highlight was the presentation by Nadia Calviño, DG Markt deputy director general, of the feedback statement and conclusions from the Corporate Governance Green Paper launched in April 2011.

The main conclusions were the following:

• In general there is agreement on: one size does not fit all; corporate governance should be principle-based; further regulation is needed only on some specific aspects such as remuneration and shareholder identification.
• There is no support for SME specific rules and rules for unlisted companies.
• Boards:
  • generally in favour of: diversity; time commitment; evaluation; responsibility for risk strategy and profile; disclosure of remuneration;
  • mainly against: mandatory separation of chairman and CEO; limitation of directorships; mandatory gender quotas; mandatory external evaluation.
• Shareholders:
  • in favour of: transparency of asset managers; clarification of acting in concert; transparency of proxy advisers; action on shareholder identification.
  • Against: new rights for minority shareholders, EU regime for employee share ownership.
• Comply or Explain: in favour of improving quality of explanations (Swedish model given as a good example whereby the company explains what is the alternative solution chosen).
• Any measures to be proposed by the second half of 2012 together with proposals on Company Law (the Commission will have a separate online consultation on Company Law beginning 2012).

Commissioner Barnier also sent a recorded message by video conference where he highlighted the following:

• The Green Paper is not an ill-considered reaction to the crisis but the crisis should not stop the Commission from improving Corporate Governance in listed companies. (Nadia Calviño added afterwards that listed companies were not the cause of the crisis but could be the solution and therefore any measures should aim at calibrating and improving their engine).
• His main concerns were: minority shareholders, director’s pay, manager’s transactions, long-term investment and governance at Board level.
• Any measures would be taken with consideration to the European Parliament’s initiative report and the responses to the future consultation on Company Law.

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