Brussels, 04/04/2011 (Agence Europe) - EU Internal Market Commissioner Michel Barnier launched a debate on Tuesday 5 April about corporate governance for companies quoted on the stock exchange, following on from a public consultation in 2010 on corporate governance in the financial world (see EUROPE 10151). Barnier will be asking interested parties how to make the membership of company boards more diversified.
According to a draft Green Paper seen by EUROPE, management boards need members with a range of different views, skills and professional experience. The European Commission is anxious to increase the number of women on management boards and will be quizzing interested parties about the idea of EU quotas. The Commission calculates that only 12% of the members of management boards are women, and it will take another 50 years at this rate to rectify the situation. Last month, EU Justice Commissioner Viviane Reding said there should be 30% of women by 2015 and did not rule out EU legislation to this end (see EUROPE 10326).
The Commission would also like to encourage more nationalities being represented on management boards. This is already seen in the Netherlands, for example, where some 54% of boards of companies quoted on the stock exchange are non-Dutch. The equivalent figure in Germany is just 8%. The Commission is also looking at how to get boards to think outside the box because often the same people have been on the board for years, from similar educational and professional backgrounds and managing their friends' companies. This might be possible by limiting the number of boards that any one individual can sit on. When it comes to remuneration, the Commission is considering the option of making it compulsory to publish policy details and to make shareholders vote on the policy for directors' pay.
Quoted companies steer clear of the idea of binding measures to improve diversity but some would approve of more information to get shareholders more involved in corporate life. Two thirds of EU member states already have rules covering this, but other people oppose the idea of an EU mechanism to make it easier to identify shareowners in order to prevent the measure enabling companies to head off shareholder action. The Commission is also considering whether there should be EU legislation on shareholder voting/proxy advisors (like RiskMetrix) to make their methodology more transparent and reduce the risk of conflicts of interest. Such consultancies exercise huge influence on shareowners by scanning the annual reports of quoted companies and advising shareholders how to vote at AGMs. (M.B./transl.fl)