The CFA Institute, the international association of investment professionals, has called on policy makers to improve corporate governance in the EU in a new report they published on Thursday 18 February.
The report finds that governance mechanisms in Europe still do not provide sufficient accountability in respect of companies or sufficient protection of shareholders’ rights and the report goes on to make several recommendations to remedy this.
“The pandemic is a sustainability catalyst”, and it has shown that much work needs to be done in order to improve investor protection in Member States, said Josina Kamerling, head of regulatory outreach for Europe at theCFA Institute, during the presentation of the report to the press.
The CFA Institute is particularly calling on the European Commission, in the context of the review of the Non-Financial Reporting Directive (see EUROPE 12430/22), to focus on inconsistencies between EU legislation regarding the disclosure of environmental, social and governance (ESG) information and non-financial information required to improve clarity.
Another challenge addressed in the report is that of holding annual general meetings during the Covid-19 pandemic. If meetings are to continue being virtual or hybrid in the future, the obstacles that have so far prevented shareholders from effectively exercising their rights, including the question of whether or not to regulate, should be addressed, Kamerling said.
TheCFA Institute is working on its own draft voluntary global ‘ESG’ standard. The project is currently in the consultation phase and should be ready to be presented next November.
See the report: https://bit.ly/3uiVqR1 (Original version in French by Marion Fontana)