The Commission Action Plan on Modernising Company Law and Enhancing Corporate Governance in the EU adopted in May this year is not just a response to recent financial scandals. It provides a comprehensive, dynamic and flexible company law and corporate governance framework for Europe.
To achieve these objectives, the Commission's approach is to be firm on the principles but flexible on their application. The Action Plan therefore proposes a mix of legislative and non-legislative measures. A pure soft law or self-regulatory approach might indeed not always be sufficient to guarantee the adoption of sound corporate governance practices.
The Commission will propose legislative initiatives where absolutely necessary, in full respect of subsidiarity, so that markets can also play their disciplining role in an efficient way.
I should stress that the Commission's efforts to improve the ways companies are managed and controlled in the EU goes well beyond our recent Action Plan.
Proper internal controls, external oversight and Corporate Governance are now right at the top of the political agenda.