Comparative Study of Corporate Governance Codes relevant to the European Union and its Member States

The Commission Services are pleased to present the comparative study on corporate governance codes relevant to the EU and its Member States. The study has been undertaken by the international law firm Weil, Gotshal & Manges LLP, in consultation with the European Association of Securities Dealers and the European Corporate Governance Network.

In its Financial Services Action Plan published in May 1999, the Commission identified issues and actions to be considered to achieve deep and liquid European capital markets that better answer the needs of issuers and investors.

One of the issues identified was the need to improve the corporate governance framework in the European Union. A series of corporate governance codes have indeed been adopted over the past decade with the aim of better protecting the interests of shareholders and/or stakeholders. Although these codes seemed to have some basic principles in common, the FSAP recognised that they spring from long-standing legal and socio-economic national traditions.

Differences in corporate governance arrangements may create unnecessary uncertainty for both issuers (a company deciding to collect capital in different European countries might have to apply different codes) and investors (investors deciding to be active on different markets in the European Union might not benefit from the same rights everywhere). Based on these observations, the FASP announced that the Commission would launch a review of existing codes of corporate governance with a view to identifying any legal or administrative barriers which could frustrate the development of a single EU financial market.

The study identifies the various corporate governance codes which may affect the way companies are directed and controlled within the European Union. It performs a detailed comparison of the corporate governance rules contained in these codes and presents a synthesis of the main lines of convergence and divergence contained in the codes. It makes an analysis of the extent to which enforcement of these provisions has been organised and presents information about the expected developments in the area of corporate governance codes within the European Union.

The study will be submitted to the High Level Group of Company Law Experts, appointed by Commissioner Bolkestein last September, with the aim of providing the Commission with recommendations on how to set up a modern framework for company law (including corporate governance) in the European Union. The Group will use the study as background research and discussion material. The Group is planning to organise wide consultations in April and May, and is expected to deliver its final report in the summer 2002.

The Commission Services believe that this comparative study may be of interest to a wide range of parties, including issuers, investors, stakeholders, and regulators. We hope it will further stimulate the debate in Member States, at EU level and internationally. We are therefore pleased to make the study available on our website. Please note that although the study was commissioned by the Directorate-General Internal Market, it does not express the Commission's official view. The consultants remain responsible for the facts and the views set out in the report.