Corporate Governance Compliance and Monitoring Systems across the EU

Transcription

1 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU By Lutgart Van den Berghe 9 Octber 2015 THE EUROPEAN CONFEDERATION OF OF DIRECTORS ASSOCIATIONS -- AVENUE DES ARTS BRUSSELS 1040

2 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU Why this prject? ecda wants t prmte gd gvernance practices and cnsiders the flexibility ffered by the cmply r explain ptin instrumental fr tailring the gvernance practices t the needs and challenges f a widely diverse crprate landscape thrughut Eurpe T this end, ecda wants t fster the respect f the 2014 EU recmmendatin, stimulating qualitative gvernance reprting The prject has been realised with the help f The members f ecda The financial and cntent supprt f Mazars The valuable cllabratin with the ECGCN The mral supprt f the Eurpean Cmmissin

3 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU A triple prject 1. The analysis f crprate gvernance cmpliance mnitring acrss the EU 2. The Bard s rle in designing an effective framewrk f crprate gvernance 3. What stakehlders think f the gvernance practices and the cmply r explain evlutin

4 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU Sme general bservatins (1/2) Huge differences within Eurpe as t the scpe f listed cmpanies Relative weight f listing: UK 241%/Sweden128% >< Lithuania 9%/Estnia10% Sharehlding structures substantially differ (dispersed >< cntrlling blcks) Cntrlling sharehlders in different shapes: cncentrated sharehlding >< cntrl enhancing mechanisms Member States have ne main CG Cde, except fr France & Prtugal, having 2 Inspiratin fr cde develpment evlved ver time Histrically: OECD/UK Recent develpments/adaptatins: EU, internatinal Revisins: temp and cntent widely differ, with increasing attentin fr internatinal harmnisatin (in line with regulatins, guidance, internatinal investr impact...)

5 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU Sme general bservatins (2/2) CG cdes are mstly a cmbined effrt between the private and the public sectr Emphasis n private self-regulatin Grwing legiferatin (milestnes Directive 2006, financial crisis 2008 Field f applicatin demands mre attentin t have a (cmparable) level playing field Origin f incrpratin versus cuntry f listing Scpe f cmpanies and flexibility t cmply t part f the cde fr sme types f cmpanies Structure f CG Cde widely differs Natinal cultures influence the apprach used (principles versus rules-based apprach) Transparency substantially differs acrss cuntries (with different % f recmmendatins that are subject t cmply r explain and disclsure rules)

6 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU Mnitring (1/2) Mnitring systems difficult t cmpare Multiple types f mnitring can prevail / can be cmbined Cmpliance with crprate law and securities regulatin Respect f Listing Rules Cmpliance with gvernance cde recmmendatins Official mnitring bdies, versus self-regulatry bdies, and eventually private initiatives (academic, cnsultants) Mnitring apprach can widely differ Checking the availability f infrmatin Checking the cmpleteness f the infrmatin and that it is nt misleading, untruthful r even false Checking the cmpliance with the Cde s recmmendatins Checking the quality f explanatins and the respect f the principle (alternative)

7 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU Mnitring (2/2) Scpe f mnitring reprts is quite different Cvering all listed cmpanies r nly a sample and/r a certain categry Analysis f all parts f the cmpliance/gvernance statement r fcus n a number f issues/aspects Annual review versus peridic review Limited t publicly available infrmatin and/r interviews with bards

8 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU Cmply r explain ( 1/2) Only a recent pint f attentin EU recmmendatin 2014 is essential stimulant in this respect Infrmatin is even mre scattered than the general mnitring infrmatin If analysis made, mainly attentin fr the type f recmmendatins that are nt cmplied with Transparency issues (remuneratin) Independence, bard cmmittees, bard evaluatin The quality f explanatins is rarely analysed

9 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU Cmply r explain ( 2/2) Overall trend: cmpliance is imprving cnsiderably Is this a gd evlutin r hiding a practice f increasing bx ticking and cpy-paste disclsure? Deviatins frm the standard best practices (making use f the flexibility ffered) nt well appreciated by investrs and their prxy advisr(s) Larger cmpanies lead the pack They are the dminant firm lgic >< quid the needs and challenges f small and mid caps

10 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU Quality f explanatins EU recmmendatin n quality f explanatins t recent t measure its impact Already mre attentin fr quality at sme mnitring bdies Mre investment needed t imprve the quality f explanatins N harmnised view n quality measures, quality categries etc. Mre analysis needed as t the effectiveness f alternatives Be aware f ptential dwnside f such categries fr mre bx ticking appraches Thanks t the EU recmmendatin mre attentin fr the decisin-prcess A gd explanatin might be mre effective than an artificial cmpliance, but fr the bard it might take mre time and mre curage t g fr the flexible and adapted rute (Phase 2 f ecda prject) A great deal f cmmunicatin and cnvincing needed twards the investment wrld and sciety at large (Phase 3 f ecda prject)

11 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU Sme verall cnclusins and t d s ( 1/2) Very dangerus t make cmparisns f cmpliance rati s acrss Eurpe Grwing attentin fr finding the crrect balance between legislatin, regulatin and self-regulatin Impssible t regulate all aspects f gvernance Public transparency is nly ne leverage t imprve gvernance structures and practices >< be aware f the ptential dwnside f bx ticking and windw dressing! Rules are nt the way frward as t bard dynamics and directr behaviur => critical rle fr bjective bard evaluatin Critical evaluatin by legislatr/rule makers f underlying assumptins N hesitatin t take a step backwards if rules d nt deliver the intended utcme

12 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU Sme verall cnclusins and t d s ( 2/2) Mre attentin needed fr bjective mnitring Self-regulatin culd imply an imprtant rle fr cmplementary bjective and critical self-evaluatin Hwever, mnitrs need credibility Rle f sharehlders t be critically analysed Hpefully, the EU cmmissin can use this reprt T secure a level playing field as t the scpe and apprach used T fster a better respect fr flexibility and rehabilitate the rute f explanatins T prmte a mre harmnised apprach t mnitring in general and evaluating/stimulating high quality explanatins mre specifically T cntinue demanding mre attentin fr the decisin-making prcess as t gvernance

13 Crprate Gvernance Cmpliance and Mnitring Systems acrss the EU