Sunday, March 20, 2011

Europe prepares for governance green paper

Financial Times
March 20, 2011

Next month the European Commission will publish a corporate governance framework for companies, laying out its views on the subject.

The green paper, which is expected to focus on shareholder engagement, boards of directors and the comply-and-explain approach to corporate governance, follows guidance on board effectiveness published by the UK’s Financial Reporting Council earlier this month.

It comes as the role of corporate governance is under increasing scrutiny by politicians and the public after the financial crisis, and follows an EC green paper last summer that focused on corporate governance in financial institutions.

“In the crisis, boards failed to do their job, to carry out checks of high risk strategies pursued by some financial institutions,” says Lutgart Van den Berghe, chairman of the policy committee at the European Confederation of Directors’ Associations.

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