Brussels, 22/11/2005 (Agence Europe) - During a speech in London on 14 November at the European Corporate Governance Conference, European Internal Market Commissioner Charlie McCreevy said the European Commission would be launching a wide-ranging public consultation in the next few weeks on the second phase EU Company Law and Corporate Governance Action Plan. Once the consultation document is published, there will be a three month period for comments. The second phase will focus on improving European company competitiveness under the Lisbon Strategy and push the EU in the direction of Better Regulation, which Charlie McCreevy described as meaning consulting interested parties, only passing EU legislation when it is the best level at which to take action, and making a full impact analysis. 'The priorities we now set in the Action Plan must be conductive to entrepreneurship and making the most of the potential of the international dimension,' said McCreevy: 'Markets have changed. So have the needs of companies and stakeholders. Our idea is to work on the adoption of a single legislative text which modernises and simplifies the company law directives by eliminating any dead wood together with any contradictory, overlapping and outdated provisions.'
Charlie McCreevy said that over the past two years, 'the short term priorities in the Action Plan have been successfully implemented… the main underlying principles in the Action Plan have been twofold: 1) enhancing transparency; and 2) empowering shareholders. These principles will remain equally valid for the second phase… We are putting the finishing touches to a couple of the outstanding measures. For example, the modification of the accounting directives which I hope will be adopted by the end of the year. This will, among other things, allow stakeholders to get a clearer picture of a company's corporate governance practices by requiring companies to disclose whether they follow a corporate governance code and where they depart from it. We are also finalising our initiative to facilitate the cross-border exercise of shareholders' rights. Our objective is to try and get the plumbing right so cross-border voting can flow across borders. I intend to submit a draft directive to my colleagues at the Commission by the end of the year,' (see EUROPE 9052).
The Commissioner argued in favour of the highly controversial issue of 'one share, one vote': 'For me, the shareholder is king or queen: this goes back to what I said at the beginning about transparency and shareholder empowerment. If these principles are followed, I am convinced it will lead to companies which are better run.' On Better Regulation, he said: 'We need to opt for instruments that put the least burden on companies and leave them as much flexibility as possible. Therefore, we will prefer a recommendation to a directive where a recommendation is suited to achieve the aim pursued.' He explained he was in the process of 'commissioning an outside study and our experts in the European Corporate Governance Forum,' launched in May 2003 in response to the financial scandals of the time, Enron WorldCom and Ahold, to update company law and strengthen company governance (see EUROPE 8467).