On Wednesday, April 9, Michel Barnier, European Commissioner for Internal Market, presented a roadmap on corporate law and governance in Europe. The goal is to review the Directive on shareholders’ rights, focusing on further transparency and greater commitments from the latter. The proposal imposes that shareholders define the remuneration policy of the directors of their company. The policy should explain how the pay conditions of employees are taken into account and the ratio between their remuneration and the average remuneration of directors. There must also be a report on these points.
According to its promoter, this proposal aims to combat excessive “short-termism” that is detrimental to the economy and European businesses. The proposal to review the directive on shareholders’ rights (2007/36) mostly aims to rectify shortfalls in terms of governance. In concrete terms, institutional investors and asset managers will have to be more transparent as regards their investment policies and commitment towards the companies of which they hold shares.
Improve transparency of the...
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