ECIIA: Action Plan - EU Company Law & Corporate Governance

07 January 2013

ECIIA published a summary of the Commission's 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 or 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.

In addition, the action plan foresees merging all major company law directives into a single instrument. This would make EU company law more accessible and comprehensible and reduce the risk of future inconsistencies.

Press release

© ECIIA