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21 May 2003

Commission presents Action Plan on Corporate Governance

The European Commission issued the action plan on 'Modernising Company Law and Enhancing Corporate Governance in the EU'. The Action Plan is prioritised over the short-, medium-, and long-term, and indicates which type of regulatory instrument should be used for each proposal, with approximate timescales, therefore complementing the current Action Plan on Financial Services.

With regard to the Sarbanes-Oxley Act the Commission hopes that the forthcoming measures will be considered as equivalent rules in the United States, preventing European audit firms to register with the PCAOB from 2004 onwards.

The main objectives pursued by the Action Plan are

  • 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.

    The Action Plan 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 Commission sees the following initiatives as the most urgent ones:

  • introduction of an Annual Corporate Governance Statement.
  • development of a legislative framework aiming at helping shareholders to exercise various rights
  • adoption of a Recommendation aiming at promoting the role of (independent) non-executive or supervisory directors.
  • adoption of a Recommendation on Directors' Remuneration.
  • creation of a European Corporate Governance Forum.

    The Plan is open to public consultation for three months. The Commission will publish a synthesis of the comments received which will be given adequate consideration and intends to launch some initiatives this year or early next year.

    Corporate Governance Action Plan

    Press release

    © European Commission

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