Making Corporate Governance Codes More Effective: A Response to the European Commission's Action Plan of December 2012

13 Pages Posted: 12 Dec 2013

See all articles by Peter Böckli

Peter Böckli

Böckli Bodmer & Partners

Paul L. Davies

University of Oxford- Faculty of Law

Eilis Ferran

University of Cambridge - Faculty of Law; European Corporate Governance Institute (ECGI)

Guido Ferrarini

University of Genoa - Law Department and Centre for Law and Finance; European Corporate Governance Institute (ECGI)

José M. Garrido Garcia

International Monetary Fund (IMF); University of Castilla-La Mancha (Spain)

Klaus J. Hopt

Max Planck Institute for Comparative and International Private Law; European Corporate Governance Institute (ECGI)

Alain Pietrancosta

Sorbonne Law School

Katharina Pistor

Columbia University School of Law

Markus Roth

University of Marburg - Faculty of Law

Rolf Skog

Göteborg University - Department of Law

Stanislaw Soltysinski

Komisja Kodyfikacyjna Prawa Cywilnego; Sołtysiński Kawecki & Szlęzak, Legal Advisors

Jaap W. Winter

Vrije Universiteit Amsterdam; University of Amsterdam; Insead

Eddy Wymeersch

Ghent University - Financial Law Institute; ECGI

Date Written: December 11, 2013

Abstract

This paper contains the European Company Law Experts' response to one of the main issues raised in the European Commission’s Action Plan of 12 December 2012, namely how to make corporate governance codes more effective. The concept of “codes’ effectiveness” has two meanings: effectiveness of the comply-explain mechanism (disclosure effectiveness) and level of adoption of the codes’ recommendations themselves (substantive effectiveness). The ECLE believes that it is of crucial importance to keep the advantages of regulation by codes while finding adequate improvements of the quality of the reports and the explanations. The relationship between the content of corporate governance codes and disclosure is discussed. A “culture of departure from code recommendations”, if well explained, is needed. The quality of corporate governance reports and the explanations should primarily be improved by incentives, but non-legal and legal sanctions may help. Improvements may also be possible by mobilizing private actors and/or by charging public or private agents and agencies with inspection and monitoring.

Keywords: Corporate Governance, Corporate Governance Codes, comply or explain, code effectiveness, disclosure, enforcement, European Commission, Action Plan

JEL Classification: G30, G34, K22, K42

Suggested Citation

Böckli, Peter and Davies, Paul L. and Ferran, Eilis and Ferrarini, Guido and Garrido Garcia, José M. and Hopt, Klaus J. and Pietrancosta, Alain and Pistor, Katharina and Roth, Markus and Skog, Rolf R. and Soltysinski, Stanislaw and Winter, Jaap W. and Wymeersch, Eddy O., Making Corporate Governance Codes More Effective: A Response to the European Commission's Action Plan of December 2012 (December 11, 2013). Oxford Legal Studies Research Paper No. 56/2014. Available at SSRN: https://ssrn.com/abstract=2366273 or http://dx.doi.org/10.2139/ssrn.2366273

Peter Böckli

Böckli Bodmer & Partners ( email )

St. Jakobs-Strasse 41
PO Box 2348
Basel, 4002
Switzerland

Paul L. Davies

University of Oxford- Faculty of Law ( email )

Harris Manchester College
Oxford, OX1 3TD
United Kingdom

Eilis Ferran

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge CB3 9DZ
United Kingdom
+ 44 1223 338335 (Phone)
+ 44 1223 338340 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Guido Ferrarini

University of Genoa - Law Department and Centre for Law and Finance ( email )

Via Balbi, 22
16126 Genova, 16100
Italy
+39 010 209 9894 (Phone)
+39 010 209 9890 (Fax)

HOME PAGE: http://www.clfge.org

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

José M. Garrido Garcia

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

University of Castilla-La Mancha (Spain) ( email )

Toledo 45071
Spain

Klaus J. Hopt (Contact Author)

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
D-20148 Hamburg
Germany
+49 40 41 90 02 05 (Phone)
+49 40 41 90 03 02 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Alain Pietrancosta

Sorbonne Law School ( email )

17, rue de la Sorbonne
Paris, IL 75005
France

Katharina Pistor

Columbia University School of Law ( email )

435 West 116th Street
New York, NY 10025
United States
212-854-0068 (Phone)
212-854-7946 (Fax)

Markus Roth

University of Marburg - Faculty of Law ( email )

Universitaetsstrasse 6
Marburg, D-35037
Germany

Rolf R. Skog

Göteborg University - Department of Law ( email )

Viktoriagatan 30
Box 650
Göteborg, 40530
Sweden
+46 31 7866990 (Phone)

HOME PAGE: www.law.gu.se

Stanislaw Soltysinski

Komisja Kodyfikacyjna Prawa Cywilnego ( email )

Ujazdowskie Ave. No. 11
Warsaw, 00-950
Poland

Sołtysiński Kawecki & Szlęzak, Legal Advisors ( email )

Wawelska Str. No. 15B
Warsaw, 02-034
Poland

Jaap W. Winter

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam
Netherlands
+31653978419 (Phone)

University of Amsterdam ( email )

Oude Manhuispoort
Amsterdam
Netherlands

Insead ( email )

Boulevard de Constance
77305 Fontainebleau Cedex
France

Eddy O. Wymeersch

Ghent University - Financial Law Institute ( email )

Universiteitstraat 4
Gent, B-9000
Belgium
+32 9 264 68 27 (Phone)
+32 9 264 68 55 (Fax)

HOME PAGE: http://www.law.ugent.be/fli

ECGI ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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