Report of the High Level Group of Company Law Experts

04 November 2002

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The High Level Group of Company Law Experts, chaired by Jaap Winters, published its report on company law and corporate governance.

The Final Report deals among others with the role of non-executive and supervisory directors and the responsibility of management for financial statements, and addresses a number of company law subjects as well as certain general themes for future development of company law in Europe.

The Group set out key-priorities for the EU on the short, medium and longer term and advises the Commission to set up an EU company law action plan. Commissioner Bolkestein said 'The Enron scandals have shown that undermining of investor confidence seriously damages the development of capital markets and subsequently economic growth. I want a full and open debate on the report's recommendations before we define our forward strategy in early 2003.'

Some of the main points sketched out in the report are:

Company law should primarily concentrate on the efficiency and competitiveness of business. Particular attention should be given to the elimination of obstacles for cross-border activities.

The Lamfalussy process is to be seen as an example. There is a growing need for continuous adaptation of EU company law. Wide and expert consultation should be an integral part of any future initiative taken at EU level.

Disclosure of information is regarded as an effective regulatory tool. It should be carefully considered whether disclosure requirements are better suited to achieve the desired effects than substantive rules.

Short term recommendations are among others:

to enhance corporate governance disclosure requirements, which also includes the collective responsibility of directors for financial and key non-financial statements of the company.

to offer efficient mechanisms for cross-border restructuring and mobility of companies, specifically by adopting proposals for the 10th and 14th Company Law Directives on cross-border mergers and transfers of seat.

to simplify the 2nd Company Law Directive on capital formation and maintenance rules on the basis of the SLIM Group recommendations.

Groups press release
Report
Commission press release

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