More than 250 corporate leaders, academics and senior officials attended this high level conference on the latest developments in corporate governance in Europe. Keynote speeches were delivered by Luxembourg Minister of Justice Luc Frieden, Internal Market Commissioner Charlie Mc Creevy, Mr Raymond Kirsch, Chairman of the Luxembourg Stock Exchange as well as Mr David Devlin, Member of the European Corporate Governance Forum and President of the Fédération Européenne des Experts Comptables (FEE). The Conference was held under the aegis of the Edmond Israël Foundation.
Transparency and accountability are crucial to ensure the stability and resilience of capital markets. The attractiveness of a financial place will depend more and more on the quality of its governance practices. For good corporate governance to become a reality, it is indispensable to have mechanisms to ensure that it does not remain dead letter. "Comply or explain" is a key principle as long as some mechanisms exist to make sure that this principle is effectively enforced. In this respect, shareholders must be able to vote in General Meetings, wherever they live in the EU. Facilitating the cross-border exercise of shareholders’ voting rights is a crucial condition for rendering control by shareholders effective.
The Conference centred on four main themes:
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The latest developments on codes for different types of economic organization, where it appears that, besides the ongoing evolution of codes of corporate governance for listed companies, new guidelines for other corporate organisations (e.g. cooperatives) and for institutional investors (e.g. insurance companies, investment and pension funds) are emerging. This shows that good corporate governance does not stop at the level of the organisations that are governed, but also applies to those that are active in corporate governance. The main challenge is to strike the right balance between legal certainty and flexibility, regulation and self-regulation and the public and private enforcement of codes.
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The statute of the Societas Europaea in respect of corporate governance practices. The Panel focused on the question as to whether the statute of the SE, including rules on co-determination, is likely to cope with modern corporate governance. The Panel concluded that the statute of the EU Regulation and the directive on the involvement of employees in SEs presented some merits in encouraging the functional separation of management and control as well as a stakeholder rather than a shareholder approach. However, in the end, appropriate corporate governance behaviour will mainly depend on the rules and codes applicable to the SE in the Member State where it is registered.
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The role of corporate governance in state-owned companies and the need for Member States to eliminate special rights such as golden shares as a way to retain control in privatised companies. The Panel was of the view that there was no place in principle for special rights in the competitive industries and that regulation is a more suitable means for ensuring the protection of public interest in relation to services of general economic interest.
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Improving the rights of shareholders across the Member States. The debate on cross-border voting highlighted that non-resident shareholders, including institutional investors still face important practical difficulties when voting in another Member State. Participants were largely supportive of concrete and pragmatic measures to facilitate e.g. ease of access to complete information in time, distance voting at Community level and reduce the cost of voting, so that all shareholders can in effect express their views and vote.
After the Netherlands and Luxembourg, the UK Presidency will organise the Third Corporate Governance Conference on 14 November 2005 in London.
(communiqué par la Présidence luxembourgeoise du Conseil de l'Union européenne)