The European Commission this week (12/12/12) set out its 16 priorities for promoting sustainable and competitive companies in the EU. After two years of investigation, the Commission has decided to focus it's workplan on three main areas:

• Transparency
• Long-Term Shareholder Engagement
• Company Law Reforms

Transparency

• Increasing transparency on board diversity and risk management;
• Improving corporate governance reporting;
• Better shareholder identification;
• Strengthening transparency rules for institutional investors on their voting and engagement policies.

Shareholder Engagement

• More transparency on remuneration policies and individual remuneration of directors, as well as a shareholders' right to vote on remuneration policy and the remuneration report;
• Better shareholders' oversight on related party transactions;
• Possibly transparency and conflicts of interest rules for proxy advisors;
• Clarification of the 'acting in concert' rules to facilitate co-operative engagement;
• Further encouragement of employee share ownership.

Company Law

• Further investigation on a possible initiative on the cross-border transfer of seats for companies;
• Facilitating cross-border mergers;
• Clear EU rules for cross-border divisions;
• Targeted measures on groups of companies, i.e. recognition of the concept of the interest of the group and more transparency regarding the group structure.
• Follow-up of the European Private Company statute proposal (IP/08/1003) with a view to enhancing cross-border opportunities for SMEs;
• An information campaign on the European Company/European Cooperative Society Statute;
• The likely codification of all EU company law rules into a single instrument.

 The provisional action plan is available here >>. At the time of writing we have no indication from the Commission of the timetable for implementation or further consultations.

EU Action Plan - Main Initiatives

Initiative

Instrument/Expected Timing

Disclosure of board diversity policy and of risk management arrangements

Amendment of the Accounting Directive, 2013

Improving the visibility of shareholdings in listed companies in Europe

Securities legislation, 2013

Improving the quality of corporate governance reports and in particular the quality of explanations which should be provided by listed companies that depart from the corporate governance code provisions

Possibly non-legislative initiative, 2013

Disclosure of voting and engagement policies as well as voting records by institutional investors

Possibly Shareholders’ Rights Directive, 2013

Improving transparency on remuneration policies and individual remuneration of directors, and granting shareholders the right to vote on the remuneration policy

Improving shareholder control over related party transactions

Improving the transparency and the conflict of interest frameworks applicable to proxy advisors

Working closely with competent national authorities and the European Securities and Markets Authority (ESMA) with a view to developing guidance to increase legal certainty as regards the relationship between investor cooperation on corporate governance issues and the rules on acting in concert

Guidance, 2013

Increasing awareness of the European Company (SE) Statute (including employees' involvement) and possibly of the European Cooperative (SCE) Statute.

Information campaign, 2013

The Commission will continue to work on the follow-up to the SPE proposal with a view to enhancing cross-border opportunities for SMEs

Further exploration

Identification of obstacles to employee share ownership in Member States

On-going analysis

Rules on cross-border transfer of registered office

Further investigation, 2013

Revision of the rules on cross-border mergers

Rules on cross-border divisions

Study, 2013 and possibly amending the cross-border mergers Directive

Codification of major company law Directives

Proposal for a codified company law Directive, 2013

Improving the information available on groups and recognition of the concept of ‘group interest’

Initiative to be determined, 2014