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European Company Law and Corporate Governance: Where Does the Action Plan of the European Commission Lead?

ECGI - Law Working Paper No. 52/2005

CORPORATE GOVERNANCE IN CONTEXT - CORPORATIONS, STATES, AND MARKETS IN EUROPE, JAPAN AND THE US, K. J. Hopt, E. Wymeersch, H. Kanda, H. Baum, eds., pp. 119-142, Oxford (Oxford University Press) 2005

31 Pages Posted: 2 Dec 2005 Last revised: 11 Dec 2009

Klaus J. Hopt

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

Date Written: October 1, 2005

Abstract

The EU Company Law Action Plan of May 21, 2003, is one of the most important documents issued by the European Commission in this field in a long time. It tells what the Commission intends to regulate and not regulate within the next five to ten years. This article explains the background of the Action Plan and its connections with securities, auditing, and takeover regulation and discusses the list of actions in two parts: topics other than corporate governance (inter alia capital maintenance, groups of companies and pyramids, restructuring, and new European company law forms) and corporate governance in particular. Key problems of European corporate governance include better disclosure by an annual corporate governance statement, helping shareholders to exercise their rights, independent directors and committee work, directors' remuneration, responsibility of board members to investors for financial statements, voting policy disclosure by institutional investors, choice between the one-tier and the two-tier board, and generally more shareholder democracy. In 2004 and 2005 the Commission came up with a number of concrete steps to address these problems, especially regarding independent directors and directors' remuneration. The debate this has spawned in the member states is colorful and occasionally highly controversial.

Keywords: EU Company Law Action Plan, Corporate Governance, board members liability, directors remuneration, investor protection

JEL Classification: K20, K22

Suggested Citation

Hopt, Klaus J., European Company Law and Corporate Governance: Where Does the Action Plan of the European Commission Lead? (October 1, 2005). ECGI - Law Working Paper No. 52/2005. Available at SSRN: https://ssrn.com/abstract=863527 or http://dx.doi.org/10.2139/ssrn.863527

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

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