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The European Commission’s Action Plan on Corporate Governance and Company Law

– a modern legal framework for more engaged shareholders and sustainable companies –. The European Commission’s Action Plan on Corporate Governance and Company Law. General overview and planned follow up. Stockholm, 27 May 2013 Dr. Paulina Dejmek Hack.

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The European Commission’s Action Plan on Corporate Governance and Company Law

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  1. – a modern legal framework for more engaged shareholders and sustainable companies – The EuropeanCommission’s Action Plan on Corporate Governance and Company Law General overviewand plannedfollow up Stockholm, 27 May 2013 Dr. Paulina Dejmek Hack

  2. Corporate governance frameworks do not always function effectively • Possible areas for action: • Oversight on executive remuneration • Oversight on related party transactions • Insufficient information on corporate governance • Difficulties in Shareholder cooperation • Lack of Transparency of proxy advisors • Long-term shareholder engagement

  3. BackgroundA careful but comprehensive rethink of the past, feedback from stakeholders, consultation and studies Consultation on the future of EU company law • Green Paper on corporate governance in financial institutions + responses • CRD III Financial crisis Late 2012/Early 2013 2012 2011 2010 • Action Plan: EU company law and corporate governance • Adoption CRD IV • Public online consultation Corporate Governance Action Plan • Green Paper on EU corporate governance + responses • Report of the reflection group on the future of EU company law • Proposal CRD IV –Corporate Governance 2005/06 2003 Consultation on future priorities 1999 Financial Services Action Plan

  4. Enhancing transparency Engaging shareholders Supporting companies` growth and competitiveness Main Actions: • Disclosure of diversity policy and non financial risks • Improving corporate governance reporting (comply or explain) • Shareholder identification • Transparency of voting policies

  5. Enhancing transparency Engaging shareholders Supporting companies` growth and competitiveness Main Actions: • Improved oversight of remuneration policy (“say on pay”) • Improved oversight of related party transactions • Regulating proxy advisors • Clarification of the concept of „acting in concert“

  6. Enhancing transparency Engaging shareholders Supporting companies` growth and competitiveness Main Actions: • Improving the framework for cross border operations • Transfer of seat • Improving the mechanism for cross-border mergers • Enabling cross-border divisions • Smart legal forms for European SMEs • Awareness of SE and SCE • EU company law codification

  7. Principles guiding any EU action in this field: • - No re-inventing of the wheel, use existing best practices where possible • - One size does not fit all - we respect that companies and countries are different - Diversity is an asset - important to respect Member States’ different legal traditions - Important not to overburden companies, proportionality, flexibility

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