Report on Information on Groups

Abstract

On 26 January 2015, the European Commission requested the Informal Company Law Expert Group (ICLEG) to consider the issue of information on groups. In response to this call one member, Martin Winner, was charged with producing a report on behalf of the Group.

The Commission’s action plan of 2012 announced an initiative on simplified communication of a group’s structure to investors. This announcement was based inter alia on the Report of the Reflection Group from 2011, which recommended making basic information on the group structure readily available to investors and presenting that information in an investor-friendly manner.

The report presents the state of the play regarding transparency of groups of companies in the Member States and at the EU level. It includes several recommendations. Among others, it recommends that listed companies should make public basic information on the group functioning and management in standardised visual form and inform investors in a simplified manner of the central group structure, especially by visualisation. The Commission should consult on whether such information should be mandatory, given on a comply-or-explain basis in the Corporate Governance Statement or encouraged in a non-legislative manner. The Commission should also consult on whether disclosure should be limited to the identity of the ultimate parent or also include verbal information on group decision-making mechanisms. The Commission should consult on the method of disclosure, especially whether disclosure should be made via the company website, the national company register, the company’s correspondence or any combination of the above.

Keywords: European Company Law, Company Law, Groups of Companies, Transparency of Groups

JEL Classification: K22