1 / 29

European Company Law on the Move

European Company Law on the Move. Jaap Winter. Introduction. Report High Level Group November 2002 General themes Specific subjects EU Company Law Action Plan Short term Medium term Long term Corporate Governance Regulation in the EU. High Level Group Report, General Themes.

lydia
Download Presentation

European Company Law on the Move

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. European Company Law on the Move Jaap Winter Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  2. Introduction • Report High Level Group November 2002 • General themes • Specific subjects • EU Company Law Action Plan • Short term • Medium term • Long term • Corporate Governance Regulation in the EU Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  3. High Level Group Report,General Themes Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  4. General Themes • Facilitating efficient and competitive business in EU • primary purpose company law • cross-border activities • Modern company law making • petrifaction of rules and reduced shelf life • alternatives: secundary legislation, standard setting, models Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  5. General Themes • Disclosure instead of substantive regulation • transparency, accountability, best practice • more scope for development, subtle enforcement • Types of companies • public vs. private • listed, open, closed Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  6. General Themes • Abuse of company law • outside objectives: combat fraud or terrorism • mobile phones • specific enforcement instruments • Modern technology • listed company’s website central filing place • central electronic filing system per Member State Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  7. High Level Group Report, Specific Subjects Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  8. Capital maintenance • Current ineffective and rigid rules in 2nd directive • Simplification • Npv shares/share buy back/pre-emption rights/financial assistance • Alternative system • Urgent because of IFRS • Solvency-test • Wrongful trading • Pre-emption rights/ fair value contribution Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  9. Groups and Pyramids • Enhanced disclosure of group relationships • Control • Financial relations • Concerns about pyramid structures • Tool to finance control by CMS • No transparency, minority shareholder protection, takeover proof • No listing for holding company whose sole or main asset is stake in other listed company Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  10. Restructuring and mobility • 10th and 14th Directive on cross-border mergers and transfers of seat • Limited scope for real seat theory (cf. ECoJ Centros, Uberseering, Inspire Art) • Simplification 3rd and 6th directive • Squeeze-out and sell-out rights • Threshold 90-95% of capital Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  11. European Private Company • SE’s little sister • Real need? • Feasibility? • 10th directive first, then reasses need and feasibility Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  12. Other European Legal Forms • European Co-operative • Common position of Member States • European Association, Mutual Society, Foundation • Wide variety of national forms, no harmonisation • Need? • Feasibility? Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  13. EU Company Law Action Plan Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  14. Objective and Agenda • Objectives • to strengthen shareholder rights and third party protection, with a proper distinction between categories of companies, and • to foster efficiency and competitiveness of business, with special attention to some specific cross-border issues. • Agenda • Short term • Medium term • Long term Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  15. Short term priorities (2003-2005) • Corporate Governance Recommendations • Simplifying 2nd directive • Proposal sep 2004: simplification • New drafts for 10th and 14th directive • Proposal 10th directive nov 2003, MS agreed nov 2004: cross-border merger + co-determination • Amendment 4th and 7th directive • Proposal oct 2004: related parties and off-balance • Feasibility study into European Private Company Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  16. Medium term priorities (2006-2008) • Feasibility study into alternative to capital maintenance rules (too late?) • Framework for groups (9th Directive?) • Prohibition of stock exchange listing for pyramid holdings • Simplification 3rd and 6th Directive (merger and split) • Possible proposal for EPC • Basic disclosure for all legal forms Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  17. Long term priorities (2009 onwards) • Possible proposal to amend 2nd directive to introduce alternative to capital maintenance rules Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  18. And more • ECJ case law re: freedom of establishment • European Company Statute to be implemented by October 2004 • 13th Directive on Takeover Bids agreed, implementation summer 2006 • Harmonisation and Regulatory Competition Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  19. Corporate Governance Regulation in the EU Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  20. Corporate governance crisis and regulation • US corporate scandals: • Principal-agent conflict • Regulation focused on combatting fraud, specificly relating to financial reporting • Europe scandals as well • Vivendi, Ahold, Parmalat, Shell • Report High Level Group Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  21. EU approach • Diversity of corporate governance systems • Flexibility in governance structures • Effect of (mandatory) legal rules doubtful • Fraud is only tip of iceberg • Code of best practice, comply or explain • Flexibility and accountability • Long standing experience in UK (listing rules, « 1/3) • Since 2002 in Germany (company law, »90%) • Sinds 1999 in France (voluntary + criminal law) Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  22. No EU Code • Underlying diversity makes single EU code impossible or useless • National codes on corporate governance • EU corporate governance forum to discuss national codes, monitoring, enforcement • But EU rules for disclosure • And EU guidance in two key areas of substance: • Role of non-executive directors • Director’s remuneration Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  23. Company Law Action Plan • Corporate governance agenda • Role of non-executive directors • Director’s remuneration • Responsibility for financial reporting, corporate governance disclosure • Shareholders’ rights • EU Corporate Governance Forum • Draft Directive on Statutory Audit Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  24. Recommendation on role of non-executive directors (Oct 2004) • Scope: listed EU companies and non-EU companies with primary listing in EU • Recommendation to Member States • Commission monitors compliance by 30.06.06 • Comply or explain or (mandatory) legislation • Sufficient independence • Chairman-CEO separation or other safeguards • Three committees (nomination, remuneration, audit), preparing board decision taking Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  25. Recommendation on Appropriate Regime for Remuneration of Directors (Oct 2004) • Scope: listed EU companies and non-EU companies with primary listing in EU • Recommendation to Member States • Commission monitors compliance by 30.06.06 • To take appropriate measures • Remuneration statement • Shareholder vote on remuneration policy • Disclosure individual director´s pay • Shareholder approval of share based pay Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  26. Responsibility of directors and disclosure (Oct 2004) • Draft directive amending 4th and 7th directive • Collective responsibility board members for financial statements • Transparency on related party transactions • Transparency on off-balance vehicles • Corporate governance statement by listed EU companies • Reference to code, comply or explain, description of internal control, takeover defenses, operation AGM, composition and operation of board Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  27. Shareholders´rights (Consultation, draft directive expected fall 2005) • Cross-border voting • Intermediaries and ultimate accountholder • Communication of information • Share blocking prohibited • Electronic participation to be facilitated • Questions and proposals • Voting in absentia to be facilitated • Confirmation of GM results and voting execution • Depositary receipts and stock lending Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

  28. EU Corporate Governance Forum (set up Oct 2004) • 15 members, business, shareholders, employees, academics, appointed for three years • Enhance convergence of national developments • Convergence as an EU objective? • Harmonisation vs. Competition • Diversity and innovation • Will good corporate governance create value? • Cross-border application of codes • Methods of monitoring and enforcement • What does comply or explain really mean? Industry Lawyers Winter Seminar 3-6 March 2005. Vinstra, Norway

More Related