On Wednesday 12 December the Commission unveiled a new action plan explaining the initiatives it intends to undertake in the area of company law and corporate governance.
On the basis of its consultations over the last two years, the Commission sets out a number of proposals which should increase the level of transparency between companies and their shareholders, facilitate long-term shareholder engagement, and support European businesses and encourage their growth and competitiveness.
The action plan also envisages 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.
Key elements of the action plan
- 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.
- 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.
- 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 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.
For mind information about company law and corporate governance, see: http://ec.europa.eu/internal_market/company/index_en.htm