EU Company Law and corporate governance

The Institute has welcomed the publication of the European Commission Communication setting out an action plan for company law and corporate governance: ‘Modernising Company Law and Enhancing Corporate Governance – a Plan to Move Forward’.

As a founding and active member of the Fédération des Experts Comptables Européens (FEE) and of the International Federation of Accountants (IFAC), the Institute has consistently promoted over many years a principles based approach to standards, to enforcement and to corporate governance. We particularly welcome the principles based outlook reflected in the positive European agenda for auditing, company law and corporate governance as set out in the European Commission's May 2003 Communications on Statutory Audit and Company Law.

The Institute will be responding in detail to the invitation to comment on the Action Plan for modernising company law and enhancing corporate governance.

Updated: 22 August 2003

Communication on Company Law and Corporate Governance

The Commission’s Communication to the Council and the European Parliament is the Commission's response to, amongst others, the Final Report of the High Level Group of Company Law Experts chaired by Jaap Winter, presented on 4 November 2002, which focused on corporate governance in the EU and the modernisation of European Company Law

The Communication proposes an Action Plan which is based on a comprehensive set of proposals, grouped under six important chapters: corporate governance, capital maintenance and alteration, groups and pyramids, corporate restructuring and mobility, the European Private Company, cooperatives and other forms of enterprises.

The Action Plan is based on a comprehensive and prioritised set of proposals for action, covering several years. The Plan is open to public consultation until 31 August 2003.

The Commission says that it does not believe that a European Corporate Governance Code would offer significant added value but would simply add an additional layer between international principles and national codes. However, a self-regulatory market approach, based solely on non-binding recommendations, is not sufficient to guarantee sound corporate governance. In view of the growing integration of European capital markets, the European Union should adopt a common approach covering a few essential rules and should ensure adequate coordination of national corporate governance codes.

Relevant documents

Our response to the DTI consultation on EU directive proposals on company reporting capital maintenance and transfer of the registered office of a company (Tech 28/05). To download the full report (PDF: 137 KB/ 20 pages).

Press Release: 'Company Law and Corporate Governance: Commission presents Action Plan', 21 May 2003 (pdf: 96 kb/4p)

Communication of 21 May 2003 from the Commission to the Council and the European Parliament (pdf: 253kn/29p)

Our response to the Jaap Winter report (below) was as members of FEE, the profession's umbrella body in Europe.

FEE's response to the consultation , 27 June 2002 (pdf: 145kb/11p))

Final Report of the High Level Group of Company Law Experts on Company Law - the Jaap Winter report, 4 November 2002

(pdf: 447kb/165 pages)

Comparative study of corporate governance codes relevant to the European Union and its Member States, January 2002

(Pdf: 330kb/112 pages)

Comparative study of corporate governance codes - executive summary (pdf: 8 pages)