The Action Plan is titled "European company law and corporate governance – a modern legal framework for more engaged shareholders and sustainable companies" and was made public on 12 December 2012. Its key elements are presented in the following summary.
Introduction
The European Commission's last Action Plan in the area of company law dates back to 2003 ("Modernising Company Law and Enhancing Corporate Governance in the European Union – A Plan to Move Forward"). A number of the 2003 Action Plan's initiatives have been adopted since then. Amongst others, the Directive on the Exercise of Shareholders Rights and the Tenth Company Law Directive on Cross-border Mergers are worth highlighting.
The new Action Plan focuses on three objectives: enhancing transparency, engaging shareholders, and improving the framework for the cross-border operations of EU companies. Further, the commission states the need to codify the existing EU company law and announces the adoption, in 2013, of a proposal codifying and merging major company law directives.
Enhancing transparency
The Commission plans amending the Accounting Directive in order to strengthen disclosure requirements with regard to board diversity and risk management. In addition, the quality of corporate governance reports has to be improved. Finally, the Action Plan announces initiatives to improve the visibility of shareholdings and to strengthen transparency rules for institutional investors.
Engaging shareholders
According to the Action Plan, effective and sustainable shareholder engagement is one of the cornerstones of listed companies' corporate governance models. Against this backdrop, the Commission aims at fostering shareholder oversight of remuneration policies and related party transactions. Also, it considers improving the transparency and conflict of interest frameworks applicable to proxy advisors. Ultimately, the Action Plan stresses the need both to clarify the relationship between investor cooperation on corporate governance issues and the 'acting in concert' concept, as well as to encourage employee share ownership throughout Europe.
Cross-border operations
In order to improve the framework for EU companies to operate across borders, the Commission will assess possible legislative initiatives on cross-border transfers of registered office and cross-border divisions. Further, it will consider the appropriateness of amendments to the Directive on cross-border mergers and promote and improve awareness of the European Company (SE) and the European Cooperative (SCE) statutes. Lastly, the Commission will continue to work on the European Private Company (SPE) proposal in order to enhance cross-border opportunities for European small and medium-sized enterprises (SMEs) and present initiatives to improve the information available on groups of companies and the recognition of the concept of 'group interest'.
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