Procedure : 2011/2181(INI)
Document stages in plenary
Document selected : A7-0051/2012

Texts tabled :

A7-0051/2012

Debates :

PV 28/03/2012 - 23
CRE 28/03/2012 - 23

Votes :

PV 29/03/2012 - 9.15
CRE 29/03/2012 - 9.15
Explanations of votes
Explanations of votes

Texts adopted :

P7_TA(2012)0118

REPORT     
PDF 236kWORD 154k
8 March 2012
PE 475.797v02-00 A7-0051/2012

on a corporate governance framework for European companies

(2011/2181(INI))

Committee on Legal Affairs

Rapporteur: Sebastian Valentin Bodu

Rapporteur for the opinion (*):

Ashley Fox, Committee on Economic and Monetary Affairs

(*) Associated committee – Rule 50 of the Rules of Procedure

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
 OPINION of the Committee on Economic and Monetary AffairS*
 OPINION of the Committee on Employment and Social Affairs
 OPINION of the Committee on Industry, Research and Energy
 OPINION of the Committee on the Internal Market and Consumer Protection
 RESULT OF FINAL VOTE IN COMMITTEE

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on a corporate governance framework for European companies

(2011/2181(INI))

The European Parliament,

–   having regard to the Commission Green Paper of 5 April 2011 on the EU corporate governance framework (COM(2011)0164),

–   having regard to its resolution of 18 May 2010 on deontological questions related to companies’ management,(1)

–   having regard to Rule 48 of its Rules of Procedure,

–   having regard to the report of the Committee on Legal Affairs and the opinions of the Committee on Economic and Monetary Affairs, the Committee on Employment and Social Affairs, the Committee on Industry, Research and Energy, and the Committee on the Internal Market and Consumer Protection (A7-0051/2012),

General approach

1.  Welcomes the Commission’s revision of the EU corporate governance framework initiated by the Green Paper;

2.  Regrets, however, that important corporate governance issues such as board decision-making, directors’ responsibility, directors’ independence, conflicts of interest or stakeholders’ involvement have been left out of the Green Paper;

3.  Regrets the Green Paper's focus on the unitary system and disregard for the dual system, which is equally widely represented in Europe; stresses that the Commission’s review of the EU corporate governance framework must take account of the rights and duties conferred on the various company bodies under national law, and in particular the differences between unitary and dual systems; hereinafter essentially uses the term ‘board of directors’ to refer to the supervisory role of directors, which, in a dual structure, generally falls to the supervisory board;

4.  Underlines the importance of creating a more transparent, stable, reliable and accountable corporate sector in the EU, with improved corporate governance; considers that the corporate sector should be able to take social, ethical and environmental concerns into account in its practices and to demonstrate its responsibilities both towards employees and shareholders and towards society at large, in addition to ensuring better economic performance and the creation of decent jobs;

5.  Takes the view, however, that good governance on its own cannot prevent excessive risk taking; calls therefore for independent auditing and rules respecting the different corporate cultures in the EU;

6.  States that it is a prerequisite that a well-governed company should be accountable and transparent to its employees, shareholders and, where appropriate, to other stakeholders;

7.  Considers that the 2004 OECD definition of corporate governance, according to which corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders, should be further promoted;

8.   Considers that, in the wake of the financial crisis, lessons can be learned from the principal bankruptcies in the business world;

9.  Stresses, in this connection, that attention must be drawn to the important role that the different committees (audit committees and, insofar as they exist in the Member States, remuneration and nomination committees) play in the good governance of a company, and calls on the Commission to strengthen their role;

10. Believes that a basic set of EU corporate governance measures should apply to all listed companies; notes that these measures should be proportional to the size, complexity and type of the company;

11. Considers that initiatives on corporate governance should go hand in hand with the initiatives on corporate social responsibility proposed by the Commission; takes the view that, particularly under present-day economic and social circumstances, corporate social responsibility could, in combination with corporate governance, help to forge closer links between companies and the social environment in which they grow and operate;

12.  Stresses that the Financial Fair Play initiative is an example of good corporate governance practice in sport; calls on other sectors and public authorities to further explore these measures with a view to implementing some of their basic principles;

13. Calls on the Commission to submit every legislative proposal it considers on corporate governance to impact assessment, which should focus both on objectives to be attained and on the need to keep companies competitive;

Boards of directors

14. Stresses that in unitary systems there should be a clear demarcation between the duties of the Chair of the Board of Directors and the Chief Executive Officer; notes, however, that this rule should be proportional to the size and the peculiarities of the company;

15. Stresses that boards must include independent individuals with a mix of skills, experiences and backgrounds, that this aspect of their composition should be adapted to the complexity of the activities of the company and that it is the responsibility of the shareholders to ensure the right balance of skills in the board;

16. Is of the opinion that recruitment policies, where they are used, should be specific and that they should be subject to a comply-or-explain regime; underlines that the drafting and approval of policy documents of this kind is an exclusive shareholder competence;

17. Calls on companies to implement transparent and meritocratic methods in the field of human resources and to develop and promote efficiently men’s and women’s talents and skills; stresses that companies must ensure equal treatment of and equal opportunities for men and women at work and contribute to an appropriate work-life balance for men and women;

18. Underlines the importance of having a broad and diverse set of skills and competences represented in the company board; recalls that reducing individuals to being merely representatives of a specific group, such as by gender, age or ethnicity, does not promote the interests of those individuals;

19. Stresses that directors must devote sufficient time to the performance of their duties; considers, however, that no one-size-fits-all rules are advisable; believes that Member States should be encouraged to set limits to the number of boards on which a director can serve; points out that this would help to increase the frequency of board meetings and improve the quality of in-house supervisory bodies; highlights the importance of board members being fully transparent and open with their other engagements;

20. Agrees that external evaluations on a periodical basis are useful tools for assessing the effectiveness of corporate governance practices; however, is of the opinion that they should not be compulsory;

21. Takes the view that it is the responsibility of management and supervisory board members to avail themselves of the training and further training necessary for fulfilment of their tasks, with assistance from the company as necessary;

22. Encourages disclosure of company remuneration policies and annual remuneration reports, which should be subject to approval by the shareholders’ meeting; stresses, however, that Member States should be allowed to go further and set requirements regarding disclosure of the individual remuneration of executive and non-executive directors, which can help to enhance transparency;

23. Believes that strong surveillance and new rules must be introduced to forbid any malpractices concerning the salaries, bonuses and compensation paid to executives of companies belonging to the financial or non-financial corporate sector that have been bailed-out by a Member State government; considers that legal action should, where necessary, be taken in order to prevent the misuse of public bail-out funds;

24.Calls for sustainable long-term remuneration policies, which should be based on the long-term functioning of the individual and his company;

25. Considers that directors’ pay rises should be consistent with the long-term viability of their companies;

26. Supports the inclusion in managers’ variable remuneration of long-term sustainability components, such as making a percentage of their variable remuneration dependent on the achievement of corporate social responsibility targets, e.g. health and safety in the workplace and employee job satisfaction;

27. Notes that the board is the body responsible for reviewing and approving company strategy, which includes the company’s approach to risk, and should report it meaningfully to shareholders as far as possible without disclosing information that may damage the company, for example in relation to competitors; considers that environmental and social risks should be included insofar as they have a material impact on the company, as already required under EU legislation;

Shareholders

28. Believes that shareholders’ engagement with the company should be encouraged by enhancing their role, but that this involvement should be a discretionary choice and never an obligation;

29. Nevertheless, believes that measures to incentivise long term investment should be considered and also a requirement for full transparency of voting for any borrowed shares, apart from bearer shares; considers that institutional investor behaviour aimed at creating liquidity and keeping good ratings should be reconsidered, as this solely encourages short-term shareholding by such investors;

30. Notes that the Shareholders’ Rights Directive(2) endorses the principle of equal treatment of shareholders and that therefore all shareholders (institutional or not) are entitled to receive the same information from the company, irrespective of their stake;

31. Calls on the Commission to bring forward proportionate proposals for Europe-wide guidelines on the type of information released to shareholders in annual company reports; considers that this information should be of a high quality and informative;

32. Notes that there is a lack of long-term focus within the market and urges the Commission to review all relevant legislation to assess whether any requirements have inadvertently added to short-termism; welcomes, in particular, the Commission’s proposal to abandon the quarterly reporting requirement in the Transparency Directive, a requirement which adds little to shareholder knowledge and simply creates short-term trading opportunities;

33. Welcomes the development of Stewardship Codes for institutional investors across the European Union; believes that a European Stewardship Code could be developed drawing on existing models and in collaboration with national authorities;

34. Stresses that institutional investors have the fundamental duty to protect their investments and that it is their responsibility to monitor the asset manager they have appointed with regard to strategies, costs, trading and the extent to which this asset manager engages with the investee companies, and therefore to require adequate transparency in the performance of the fiduciary duties;

35. Is of the opinion, in this connection, that institutional investors should be free to design the relevant incentive structures in their professional relationship with asset managers;

36. Notes that conflicts of interest, including those of a potential nature, should always be disclosed and that appropriate action is needed at EU level;

37. Calls on the Commission to amend the Shareholders’ Rights Directive in such a way as to evaluate by what means shareholders' participation can be further enhanced; considers, in this connection, that the role of electronic voting at general meetings of listed companies in order to encourage shareholders’ participation, especially with regard to cross-border shareholders, should be analysed by the Commission through an impact assessment;

38. Reminds the Commission of the need for a clear-cut definition of ‘acting in concert’, as the lack of uniform rules constitutes one of the main obstacles to shareholders’ cooperation;

39.  Believes that proxy advisors play a very important role, but that their activities are often subject to conflicts of interest; calls on the Commission to ensure further regulation of proxy advisors, giving special attention to transparency and conflict-of-interest issues; is of the opinion that proxy advisors should be prohibited from providing consulting services for the investee company;

40. Considers that companies should be entitled to choose between a name shares regime and a bearer shares regime; considers that, if they choose name shares, companies should be entitled to know the identity of their owners and that minimum harmonisation requirements should be set at EU level for the disclosure of material shareholdings; considers that this should be without prejudice to the right of the owners of bearer shares not to disclose their identity;

41. Notes that, although the protection of minority shareholders is an issue which is addressed by national company law provisions, Union action might be useful to promote proxy voting;

42. Endorses the guidelines contained in the statement issued by the European Corporate Governance Forum on related party transactions for listed entities on 10 March 2011; encourages the Commission to take action at EU level by means of a soft law measure such as a recommendation;

43. Believes that the question of employee share ownership schemes is one which should be regulated at Member State level and left to negotiations between employers and employees: the possibility of participating in such a scheme should always be of a voluntary nature;

The comply or explain framework

44.  Believes that the ‘comply-or-explain’ system is a useful tool in corporate governance; is in favour of compulsory adherence to a national corporate governance code or a Code of Conduct chosen by the company; considers that any deviation from the Code of Conduct should be explained in a meaningful way and that, in addition to this explanation, the alternative corporate governance measure taken should be described and explained;

45.  Stresses the need to achieve better functioning of, and compliance with, existing governance rules and recommendations rather than imposing binding European corporate governance rules;

46. Believes that codes of practice can deliver behavioural change and that the flexibility provided by codes allows innovation which can draw on best practice throughout the EU; believes that a sharing of best practice would improve corporate governance in the EU;

o

o o

47. Instructs its President to forward this resolution to the Council and the Commission.

(1)

Texts adopted, P7_TA(2010)0165.

(2)

Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies.


OPINION of the Committee on Economic and Monetary AffairS* (21.12.2011)

for the Committee on Legal Affairs

on a corporate governance framework for European companies

(2011/2181(INI))

Rapporteur (*): Ashley Fox

(*) Procedure with associated committees - Rule 50 of the Rules of Procedure

SUGGESTIONS

The Committee on Economic and Monetary Affairs calls on the Committee on Legal Affairs, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1. Welcomes the Commission’s green paper on the EU corporate governance framework; believes that, given the diverse nature of existing national frameworks and individual listed companies, a proportionate and flexible approach to corporate governance must be applied; calls for excessive bureaucratic burdens to be avoided, taking into account the ambitious growth targets set by Agenda 2020 and the provisions of Directive 2006/46/EC;

2. Considers that companies should put in place mechanisms (training, information briefings, regular newsletters, etc.) to increase shareholders’ awareness, participation and responsibility, and exchange best practices, provided that this would not impose disproportionate burdens on companies;

3. States that it is a prerequisite that a well-governed company should be accountable and transparent to its employees, shareholders and, where appropriate, to other stakeholders;

4. Considers that, in the wake of the financial crisis, lessons can be learned from the principal shortcomings in the business world;

5. Advocates, nonetheless, a certain restraint in this context and calls for every proposal to be assessed very critically in the light of the objectives to be attained and the cost-benefit ratio of such proposals;

6. Does not consider a ‘one size fits all approach’ to be appropriate in view of the considerable diversity of companies within Europe and in particular the difference between listed and unlisted companies; believes in a ’comply or explain’ approach, including codes of best practice, targeted principle-based regulation, and enhanced supervision at national and EU level ensuring that the information and explanations from companies are reliable and of high quality, helping to improve shareholder scrutiny; considers that enforcement action should be taken where companies fail to explain the reason for deviating from the relevant code, and that this failure should also be publicised; takes the view that enhanced ‘comply or explain’ procedures for systemic companies should ensure that the appropriate regulator is satisfied that the explanation is clear and contains the information needed by shareholders to decide whether it is satisfactory;

7. Emphasises that the Green Paper only deals with stock exchange listed companies, but considers that good governance can also benefit unlisted companies and encourages the Commission in cooperation with business organisations to develop non-binding guidance for such companies;

8. Notes in the meantime that more effective enforcement of ‘comply or explain’ should involve peer pressure, by making monitoring reports on companies publicly available;

9. Takes the view that the identification of shareholders should be facilitated in order to encourage dialogue between companies and their shareholders and reduce the risk of abuse connected to ‘empty voting’;

10. Agrees with the Commission on the need to increase shareholder identification and welcomes its proposals in the Transparency Directive on this issue; calls on the remaining Member States to grant issuers the right to know their domestic shareholders;

11. Believes that codes of practice can deliver behavioural change and that the flexibility provided by codes allows innovation which can draw on best practice throughout the EU; believes that a sharing of best practice would improve corporate governance in the EU;

12. Believes that existing codes should be strengthened and that more effective monitoring of codes and better quality of explanations are required; stresses that shareholders (not only the majority but also minority ones) must play effectively their role in the governance of companies, that they should contribute more to responsible corporate governance, and that they should also be encouraged to think of the company’s long-term financial results; considers that, amongst other things, shareholders should have the right to reject the remuneration policy defined by the remuneration committee at the general meeting; believes that shareholders should inform regulators when a company provides an unacceptable explanation for departing from a code of practice;

13. Notes the lack of progress made in increasing gender diversity on company boards; calls on the Commission to require listed companies in their annual report to describe their policy on diversity, including gender, the targets it has set for implementing the policy, and progress on achieving those targets; emphasises that corporate management and remuneration policies must comply with and foster the principle of equal treatment of women and men established by EU directives;

14. Recognises that transparency is necessary with regard to related party transactions and that significant transactions which involve a related party should be notified to the listing authority and be accompanied by a letter from an independent adviser confirming that the transaction is fair and reasonable, or should be subject to a vote of shareholders with the related party being excluded from this vote; proposes that ESMA issue guidelines concerning the appropriate benchmark in consultation with the relevant national authorities;

15. Stresses that a well-governed company should be transparent and accountable to its shareholders and where appropriate to other stakeholders; reaffirms that directors of corporate entities have to take account of sustainability and long-term interests when taking decisions, in order to minimise risks;

16. Welcomes the development of Stewardship Codes for institutional investors across the European Union; believes that a European Stewardship Code could be developed drawing on existing models and in collaboration with national authorities;

17. Notes that there is a lack of long-term focus within the market and urges the Commission to review all relevant legislation to assess whether any requirements have inadvertently added to short-termism; in particular welcomes the Commission’s proposal to abandon the requirement for quarterly reporting in the Transparency Directive, a requirement which adds little to shareholder knowledge and simply creates short-term trading opportunities;

18. Stresses the need for company board members to be selected on the basis of a broad set of criteria including relevant experience and qualifications;

19. Underlines that it is crucial to ensure that non-executive directors devote sufficient time to monitoring and supervising particular companies and that the number of mandates that a non-executive director may hold should therefore take into account the scale and complexity of the business and the extra responsibilities associated with holding chairmanships and therefore be limited;

20. Emphasises the need for the roles of CEO and chairman to be separated and that the roles should only be combined in exceptional circumstances;

21. Calls for an obligatory cooling-off period for executive directors who wish to take a non-executive appointment in the same firm, to ensure that oversight by non-executives is appropriately independent;

22. Welcomes the Commission’s recommendation that listed companies should disclose their remuneration policy, remuneration of individual directors and the results of shareholders’ votes on remuneration, and supports the mandatory disclosure of individual remuneration of executive and non-executive directors of listed companies;

23. Contends that while risk is often an inherent part of business activity, it is important for boards of directors to clearly define their company’s risk policy and ensure proper and independent oversight of risk management processes;

24. Notes the many benefits of employee share ownership, including raising productivity and the commitment of workers in their company, and calls on the Commission to work with Member States to extend and encourage employee share ownership.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

20.12.2011

 

 

 

Result of final vote

+:

–:

0:

26

5

12

Members present for the final vote

Burkhard Balz, Sharon Bowles, Udo Bullmann, Pascal Canfin, Nikolaos Chountis, George Sabin Cutaş, Leonardo Domenici, Derk Jan Eppink, Diogo Feio, Markus Ferber, Elisa Ferreira, Ildikó Gáll-Pelcz, Jean-Paul Gauzès, Sven Giegold, Sylvie Goulard, Gunnar Hökmark, Syed Kamall, Othmar Karas, Wolf Klinz, Jürgen Klute, Rodi Kratsa-Tsagaropoulou, Philippe Lamberts, Werner Langen, Astrid Lulling, Arlene McCarthy, Ivari Padar, Alfredo Pallone, Anni Podimata, Antolín Sánchez Presedo, Olle Schmidt, Edward Scicluna, Peter Simon, Theodor Dumitru Stolojan, Kay Swinburne, Marianne Thyssen, Corien Wortmann-Kool

Substitute(s) present for the final vote

Sophie Auconie, Elena Băsescu, Pervenche Berès, Saïd El Khadraoui, Ashley Fox, Danuta Maria Hübner, Sophia in ‘t Veld, Thomas Mann


OPINION of the Committee on Employment and Social Affairs (7.12.2011)

for the Committee on Legal Affairs

on a corporate governance framework for European companies

(2011/2181(INI))

Rapporteur: Ole Christensen

SUGGESTIONS

The Committee on Employment and Social Affairs calls on the Committee on Legal Affairs, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.  Underlines the importance of creating a more transparent, stable, reliable and accountable corporate sector in the EU, with improved corporate governance; considers that the corporate sector should be able to take social, ethical and environmental concerns into account in its practices and to demonstrate its responsibilities both towards employees and shareholders and towards society at large, in addition to ensuring better economic performance and the creation of decent jobs;

2.  Takes the view, however, that good governance on its own cannot prevent excessive risk taking; calls therefore for independent auditing and rules respecting the different corporate cultures in the EU;

3.  Considers that, in the wake of the financial crisis, lessons can be learned from the principal bankruptcies in the business world;

4.  Points out that the aim of a corporate governance framework is to create and ensure a sound business environment where responsibility and respect for work are in equilibrium with the sound development of companies that create more jobs and lead to economic and social stability;

5.  Points out that corporate governance should, among other things, facilitate relations with a company’s various stakeholders, such as with its employees, who contribute to, and are dependent on, their company’s success and performance; recalls, therefore, the importance of regular dialogue and employees’ involvement in the affairs of a company which may also take the form of codetermination in corporate governance, as defined in the European Industrial Relations Dictionary(1), and is disappointed that this aspect is underestimated in the Green Paper;

6.  Considers that the 2004 OECD definition of corporate governance, according to which corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders, should be further promoted;

7.  Underlines that the effective regulation of corporate governance should also be based on principles such as clarity, harmonisation, transparency, enforcement and sanctions, on effective functioning of the board of directors, on appropriate shareholder engagement and on efficient monitoring and enforcement of corporate governance codes;

8.  Stresses the need to achieve better functioning of, and compliance with, existing governance rules and recommendations rather than imposing binding European corporate governance rules;

9.  Calls on the Commission to submit every legislative proposal it considers on corporate governance to impact assessment which should focus both on objectives to be attained and on the need to keep companies competitive;

10. Supports a differentiated and proportionate regime for small and medium-sized listed companies;

11. Does not consider a ‘one size fits all approach’ to be helpful in view of the considerable diversity of companies within Europe and in particular the difference between listed and unlisted companies;

12. Is convinced that voluntary codes of conduct are the most efficient way of achieving good corporate governance;

13. Considers that initiatives on corporate governance should go hand in hand with the initiatives on corporate social responsibility proposed by the Commission; takes the view that, particularly under present-day economic and social circumstances, corporate social responsibility could, in combination with corporate governance, help to forge closer links between companies and the social environment in which they grow and operate;

14. Considers that employee information, consultation and participation in decision-making in line with European and national law should be promoted and strengthened, with special attention paid to SMEs; believes that increased levels of participation can be used as a motivational tool for employees and that their privileged insight into internal company procedures can enable employee representatives to contribute significantly to diversity and quality on supervisory boards, thus contributing to the long-term sustainability of corporate strategies;

15. Calls for greater diversity including gender diversity and complementarity of individual skills, expertise and experience in company supervisory and management boards and structures, so as to benefit from more diverse views, debates and challenges, talents and leadership styles in companies’ highest positions;

16. Emphasises the importance of greater female representation in company boards and other top positions, as provided in the Commission’s Women’s Charter; notes that Member States and companies have taken various measures to increase women’s representation on corporate boards, including gender quotas; stresses however, that besides existing practices there is also a need for diversity measures, measures contributing to work-life balance, and in-house career guidance; encourages companies to sign up to the ‘Women on the Board Pledge for Europe’, unveiled by the Commission on 1 March 2011, and to meet its targets;

17. Considers that more transparency is needed in the recruitment process of high-level executives, and points out that members’ profiles, different leadership experiences, international, national or regional professional backgrounds can contribute to enhancing the effective functionality of the board of directors;

18. Takes the view that it is the responsibility of management and supervisory board members to avail themselves of the training and further training necessary for fulfilment of their tasks, with assistance from the company as necessary;

19. Believes that it is important to ensure that all shareholders are treated equally and fairly, given that minority shareholder protection is very complicated in Europe, with minority shareholders finding it difficult to represent their interests in companies with dominant shareholders;

20. Calls for sustainable long-term remuneration policies which should be based on the long-term functioning of the individual and his company; is of the view that inclusion of stock options as part of remuneration schemes should be minimised; supports, however, the promotion of voluntary employee share ownership schemes, carefully assessed so as to avoid exposure to risks from lack of diversification for employees, and open to all employees within a company; considers that employee share ownership should enable employees to share in the profits, but may not, under any circumstances, replace their wages or salaries or hinder collective bargaining;

21. Supports the inclusion in managers’ variable remuneration of long-term sustainability components, such as making a percentage of their variable remuneration dependent on the achievement of corporate social responsibility targets such as health and safety in the workplace, employee job satisfaction, etc.;

22. Supports full and mandatory:

- yearly disclosure of executive remuneration policies and schemes and of companies’ risk profiles;

- external evaluation of the boards and management committees of listed companies, to be carried out at least every three years, along with an (annual) evaluation carried out by the board itself in accordance with the Commission’s recommendations(2);

- disclosure of all board members’ business activities, including all posts held on other boards;

- disclosure of a comparison by gender of pay levels;

23. Believes that steps for improving transparency in corporate governance and the regime for non-financial disclosure are necessary; considers that they should be proportional to company size and should not create additional administrative burdens for SMEs as a main source of employment in EU;

24. Takes the view that companies which do not comply with the corporate governance codes should be required to provide detailed explanations of such decisions on a ‘comply or explain’ basis, as well as to describe the alternative solutions that they have adopted; considers that such a ‘comply or explain’ approach could benefit most from a monitoring system which assigns priority to transparency and reliable information of high quality;

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

5.12.2011

 

 

 

Result of final vote

+:

–:

0:

37

0

6

Members present for the final vote

Regina Bastos, Edit Bauer, Philippe Boulland, Milan Cabrnoch, Alejandro Cercas, Ole Christensen, Sergio Gaetano Cofferati, Frédéric Daerden, Karima Delli, Sari Essayah, Richard Falbr, Ilda Figueiredo, Julie Girling, Roger Helmer, Nadja Hirsch, Liisa Jaakonsaari, Danuta Jazłowiecka, Jean Lambert, Veronica Lope Fontagné, Olle Ludvigsson, Elizabeth Lynne, Elisabeth Morin-Chartier, Csaba Őry, Siiri Oviir, Rovana Plumb, Konstantinos Poupakis, Sylvana Rapti, Licia Ronzulli, Elisabeth Schroedter, Traian Ungureanu, Andrea Zanoni

Substitute(s) present for the final vote

Georges Bach, Raffaele Baldassarre, Sergio Gutiérrez Prieto, Gesine Meissner, Ria Oomen-Ruijten, Evelyn Regner, Csaba Sógor, Emilie Turunen, Gabriele Zimmer

Substitute(s) under Rule 187(2) present for the final vote

Cornelia Ernst, Sylvie Guillaume, Phil Prendergast

(1)

European Foundation for the Improvement of the Living and Working Conditions (Eurofound).

(2)

Commission Recommendation 2005/162/EC of 15 February 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board, OJ L 52, 25.2.2005, p. 51.


OPINION of the Committee on Industry, Research and Energy (21.12.2011)

for the Committee on Legal Affairs

on a corporate governance framework for European companies

(2011/2181(INI))

Rapporteur: Kolarska-Bobińska

SUGGESTIONS

The Committee on Industry, Research and Energy calls on the Committee on Legal Affairs, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.  Welcomes the Commission’s Green Paper, but stresses that the revised framework should be supported by efficient implementation tools and concrete measures as well as reinforced supervision at national and EU level to avoid the risk of it being only formally adopted by boards; believes that the revised framework must also take into account that company law in Member States stems from different traditions and judicial principles and these differences should be respected while working towards a minimum EU CG model which allows among other aspects for a longer-term perspective for the involvement of employees in company boards;

2.  Believes that implementation measures should include:

· Measures to increase the responsibility of individual board members and companies, including possible national systems of sanctions by the ways and means that are suitable for the different judicial traditions,

· An annual conference of chairs of corporate boards, including an award for good governance,

· A requirement that board members should satisfy formal eligibility and knowledge requirements and that board vacancies should be published,

· Measures on the public disclosure of grey activities, conflicts of interest and cross-trading between parent and daughter companies,

· An annual Commission ‘naming and shaming’ report on failure to apply corporate governance (CG);

3.  While welcoming voluntary industry agreements on the ‘comply or explain’ principle and while encouraging further such agreements at EU level, recognises that the financial crisis has led to questions about their effectiveness; believes that the Commission should carry out an assessment of the use of ‘comply or explain’ clauses and the extent to which such clauses or alternative clauses should be included in any EU framework in either a voluntary or mandatory capacity;

4.  Asks the Commission and Member States to take into account the size and turnover of EU companies while establishing corporate governance measures in order to not hinder effective management of SMEs;

5.  Stresses that it is absolutely necessary that the functions of CEO and Chair of the Board be defined and split, at least in the case of undertakings with more than 50 employees and with a turnover of more than EUR 1 million;

6.  Supports the requirement for public disclosure on diversity policy and calls for concrete measures to increase the representation of women on boards, ideally by means of soft law instruments; underlines also the need for appropriate measures such as childcare arrangements to make gender diversity a reality;

7.  While respecting that it is the competence of the annual shareholders’ meeting of a company to appoint members of its board, believes that the number of board seats held by board members in different companies at the same time should be limited and that the inclusion of ‘grey directors’ should be phased out;

8.  Supports the adoption, before the re-election of a board, of an evaluation report on its performance, which should be issued to shareholders;

9.  Believes that risk management should be at the heart of CG and should be listed as a major responsibility; of the director and the board; believes that risk management should also cover non-financial risks such as in the area of environmental damage and human rights violations;

10. Believes that boards should take appropriate measures to counteract the pervasiveness of short-termism in CG, particularly with regard to the design of asset management contracts;

11. Is strongly in favour of a European mechanism to help issuers identify their shareholders in order to facilitate dialogue on CG issues and rule out possible abuses stemming from empty voting; believes that shareholders must be able to play a central role in the governance of companies and more actively contribute to responsible corporate governance;

12. Supports the creation of greater protection for minority shareholders, while including measures to avoid abuse and to encourage shareholders to focus on their company’s long-term financial results;

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

20.12.2011

 

 

 

Result of final vote

+:

–:

0:

39

4

2

Members present for the final vote

Jean-Pierre Audy, Ivo Belet, Bendt Bendtsen, Jan Březina, Maria Da Graça Carvalho, Giles Chichester, Pilar del Castillo Vera, Ioan Enciu, Vicky Ford, Adam Gierek, Fiona Hall, Jacky Hénin, Kent Johansson, Romana Jordan Cizelj, Krišjānis Kariņš, Philippe Lamberts, Bogdan Kazimierz Marcinkiewicz, Jaroslav Paška, Anni Podimata, Miloslav Ransdorf, Herbert Reul, Teresa Riera Madurell, Michèle Rivasi, Jens Rohde, Paul Rübig, Amalia Sartori, Salvador Sedó i Alabart, Francisco Sosa Wagner, Konrad Szymański, Michael Theurer, Britta Thomsen, Evžen Tošenovský, Ioannis A. Tsoukalas, Claude Turmes, Marita Ulvskog, Vladimir Urutchev, Kathleen Van Brempt, Alejo Vidal-Quadras

Substitute(s) present for the final vote

Reinhard Bütikofer, António Fernando Correia De Campos, Francesco De Angelis, Andrzej Grzyb, Seán Kelly, Werner Langen, Vladimír Remek


OPINION of the Committee on the Internal Market and Consumer Protection (24.1.2012)

for the Committee on Legal Affairs

on a corporate governance framework for European companies

(2011/2181(INI))

Rapporteur: Constance Le Grip

SUGGESTIONS

The Committee on the Internal Market and Consumer Protection calls on the Committee on Legal Affairs, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.  Takes the view that effective corporate governance should help promote sustainable growth and social responsibility in the single market and be oriented towards competitiveness and long-term investment strategies;

2.  Takes the view, as also emphasised by the Commission in its Communication of 27 October 2010 ‘Towards a Single Market Act’(1), that it is of paramount importance that European business demonstrates the utmost responsibility not only towards its employees and shareholders but also towards society at large;

3.  Calls on the business community to take its shared responsibility and to step up its commitment to promote sustainable consumption as an integral part of company strategies;

4.  Calls on companies and shareholders to increase the diversity of company boards in terms of professional, social and cultural background, with the aim of stimulating debate and fostering the emergence of new ideas; underlines that diversity is an asset for more representative decision-making in leading positions in companies;

5.  Emphasises the importance of capitalising on shareholder involvement in order to promote long-term investment strategies and to prevent inappropriate short-termism among investors that can sometimes threaten the long-term survival of the companies concerned, and hence, by extension, their small shareholders and employees, as well as consumers;

6.  Recommends that Member States monitor whether companies provide their shareholders with the appropriate corporate governance statements in order to ensure full transparency and improve shareholder knowledge of corporate governance practices, thus helping to protect shareholders and citizens against excessive risk-taking and short-termism;

7.  Believes it important to increase employee involvement in companies’ decision-making processes, for example by means of employee share-holding schemes, in order to increase motivation and ensure cohesion within companies;

8.  Firmly emphasises that corporate management and remuneration policies must be sound and responsible and comply with the principles of wage parity and equal treatment of women and men, in accordance with the EU provisions in force; calls on the Commission to bring forward measures to ensure more balanced representation of women on boards of directors, with the aim of achieving at least 40% representation of each gender by 2020;

9.  Proposes that measures for more balanced representation of women on boards of directors that may be taken include requiring the nomination committees to state, in connection with presenting their proposals, what effort they have made to attain this goal, encouraging peer comparison systems for public and private boards of directors, training of nomination committees, creating rosters of competent women candidates and encouraging open recruitment processes rather than untransparent appointments; calls on the Commission to require listed companies in their annual reports to describe their policy on diversity, including gender, the targets they have set for implementing the policy, and progress on achieving those targets; emphasises that corporate management and remuneration policies must comply with and foster the principle of equal treatment of women and men established by EU directives;

10. Stresses that the role of shareholders in establishing a remuneration policy for directors should be strengthened;

11. Welcomes the Commission’s efforts to support cross-border shareholder voting as a means to remove barriers to shareholder cooperation within the internal market, provided that this is done in a transparent and secure manner;

12. Welcomes the Commission’s recommendation that companies should disclose their remuneration policy and the results of shareholders’ votes on remuneration, and establish independent committees on remuneration;

13. Calls on the Commission to bring forward proportionate proposals for Europe-wide guidelines on the type of information released to shareholders in annual company reports; considers that this information should be of a high quality and informative;

14. Calls on the Commission to adapt good corporate governance measures to the characteristics and needs of SMEs, given their limited resources, particularly in the fields of administration and human resources.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

24.1.2012

 

 

 

Result of final vote

+:

–:

0:

35

2

0

Members present for the final vote

Pablo Arias Echeverría, Adam Bielan, Cristian Silviu Buşoi, Jorgo Chatzimarkakis, Sergio Gaetano Cofferati, Anna Maria Corazza Bildt, António Fernando Correia De Campos, Cornelis de Jong, Christian Engström, Evelyne Gebhardt, Louis Grech, Mikael Gustafsson, Małgorzata Handzlik, Iliana Ivanova, Sandra Kalniete, Eija-Riitta Korhola, Edvard Kožušník, Kurt Lechner, Toine Manders, Hans-Peter Mayer, Phil Prendergast, Mitro Repo, Heide Rühle, Christel Schaldemose, Andreas Schwab, Róża Gräfin von Thun und Hohenstein, Emilie Turunen, Bernadette Vergnaud, Barbara Weiler

Substitute(s) present for the final vote

Ashley Fox, Marielle Gallo, Ildikó Gáll-Pelcz, Anna Hedh, Konstantinos Poupakis, Olle Schmidt

(1)

COM(2010)0608.


RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

1.3.2012

 

 

 

Result of final vote

+:

–:

0:

14

9

0

Members present for the final vote

Raffaele Baldassarre, Luigi Berlinguer, Sebastian Valentin Bodu, Françoise Castex, Christian Engström, Marielle Gallo, Giuseppe Gargani, Lidia Joanna Geringer de Oedenberg, Sajjad Karim, Klaus-Heiner Lehne, Antonio Masip Hidalgo, Jiří Maštálka, Alajos Mészáros, Bernhard Rapkay, Evelyn Regner, Alexandra Thein, Rainer Wieland, Cecilia Wikström, Tadeusz Zwiefka

Substitute(s) present for the final vote

Piotr Borys, Cristian Silviu Buşoi, Kurt Lechner, Eva Lichtenberger, Angelika Niebler, Dagmar Roth-Behrendt

Substitute(s) under Rule 187(2) present for the final vote

Oreste Rossi, Jacek Włosowicz

Last updated: 15 March 2012Legal notice