Brussels, 02/04/2002 (Agence Europe) - On the internet, the European Commission has published a study of companies' internal governance that calls for greater dissemination of good practice rather than the adoption of a single European code.
The study will be submitted to the Winters High Level Group of Company Law Experts, which was commissioned in September 2001 by the European Commission to prepare recommendations for the setting up of a modern framework for company law. The Group will launch consultations later this month and publish its final report in the summer.
The objective, as outlined in the Financial Services Action Plan is to reduce the gap between corporate governance practices that can cause needless uncertainty for both issuers and investors, as the Commission puts it.
The study was carried out by the international law firm Weil, Gotshal & Manges LLP together with the European Association of Securities Dealers and the European Corporate Governance Network. In their conclusions the authors argue that "neither detailed study of the codes nor the private sector sounding that was conducted indicate that code variation poses an impediment to a single European equity market.
The various codes emanating form Member States are fairly similar and appear to support a convergence of governance practices"… "there does not appear to be a need for a European Union-wide code". The OECD Codes of Corporate Governance issued in 1999 provide coherent basic principles, note the authors.
They argue that any future EU-wide efforts should focus on reducing participation barriers and information barriers to the ability of shareholders to assess the governance of corporations. The Commission could also encourage listed companies to provide more information about, for example, corporate ownership structure, family relationships at senior level, identity and composition of board committees, how many board meetings are held a year, etc.
In fine, the authors of the study suggest setting up a forum where national policy makers could come together and discuss common issues and approaches. The study can be accessed on the web: http: //europa.eu.int/comm/internal_market/en/company/company/news/corp-gov-codes-rpt-part1_en.pdf