The European Commission is striking a healthy balance between flexibility and hard rules in its reforms to the region’s corporate governance regime, according to key organisations affected by the changes.
In a report compiled by the ECIIA, The future of European governance: key views from key people, Ugo Bassi Director in the European Commission’s Internal Market DG in charge of the Capital and Companies Directorate, explains how the Commission has focused on the principle of greater transparency in reporting to bring about better corporate governance practice and to generate greater understanding among investors.
“We would like to inject as much transparency as we can into the system,” he says in the document. He believes that this strategy has enabled the Commission to move away from prescribing hard and fast rules that would have been unpopular in much of the business community.
While the respondents have some reservations about certain details of the reforms, all broadly supported the Commission’s emphasis on transparency.
Participants included Patrick Zurstrassen, Chairman of the European Confederation of Directors’ Associations, Carlos Montalvo, Executive Director of the European Insurance and Occupational Pensions Authority, Michel Dennery, Vice President of Federation of European Risk Management Associations, and Armand Lumens, Head of Internal Audit at Shell.
“We wanted to ask those representing core participants in the corporate governance system whether they were happy with the direction the changes had taken,” says Marie-Helene Laimay, President of ECIIA. “The booklet represents a snap shot of views at the very time when organisations are getting ready for the new corporate governance landscape.”