On 12 December 2012, the European Commission adopted an action plan to adapt EU company law and corporate governance rules for companies, investors and employees to reflect the needs of today’s society and the dynamic economic climate.
Key elements of the Action Plan include:
Increasing the level of transparency between companies and their shareholders in order to improve corporate governance. This will include in particular:
- Increasing companies’ transparency as regards their board diversity and risk management policies
- Improving corporate governance reporting
- Strengthening transparency rules for institutional investors on their voting and engagement policies
Initiatives aimed at encouraging and facilitating long-term shareholder engagement, for example:
- More transparency on remuneration policies and individual remuneration of directors, as well as shareholders' right to vote on a company’s remuneration policy and the provision of a remuneration report to shareholders
- Better shareholders' oversight on related party transactions, i.e. dealings between the company and its directors or controlling shareholders
- Clarification of the 'acting in concert' concept to make shareholder cooperation on corporate governance issues easier
- Initiatives in the field of company law to support European businesses and encourage their growth and competitiveness, such as:- Facilitating cross-border mergers- Enhancing cross-border opportunities for SMEs
The Action Plan anticipates that all major EU company law directives will be merged into a single instrument.
The Action Plan applies to publicly-listed and private limited liability companies through EU company law and, with respect to publicly-listed companies only, corporate governance initiatives.
It is anticipated that the Action Plan proposals will be initiated during 2013 and any legislation is unlikely to take effect until some time after that.