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Avukat-Ankara ve Brüksel Baroları Uluslararası ve Avrupa İş Hukuku Uzmanı Attorney at the Ankara & Brussels Bars International & European Business Law The "European Company law and corporate governance are right at the heart of the European political agenda, on both sides of the Atlantic. That's because economies only work; "if companies run efficiently and transparently". What Is The European Company Law Action Plan? Strengthening shareholders rights, reinforcing protection for employees and creditors, and increasing the efficiency and competitiveness of business are the main aims of a EC Action Plan on "Modernising Company Law and Enhancing Corporate Governance in the EU". It is based on a comprehensive and prioritized set of proposals for action, covering several years. The EC Action Plan devotes special attention to a series of corporate governance initiatives aiming at boosting confidence on capital markets. As you know, the "European Company law and corporate governance are right at the heart of the European political agenda, on both sides of the Atlantic. That's because economies only work ; "if companies run efficiently and transparently". We have seen vividly what happens if they are not: Investment and jobs will be lost; and in the worst cases, of which there are too many, shareholders, employees, creditors and the public are ripped off. As a result, prompt European action is needed to ensure sustainable public confidence in financial markets. In that sense, the EC Action Plan foreseens to provide a clear and considered framework combining new law where necessary with other solutions. It will try to help deliver the integrated and modern company law and corporate governance framework which businesses, markets and the public are calling for. The EC is trying to shoulder its responsibilities: "Corporate Europe must shape up and do the same". Working in partnership, European & Candidate Countries have a unique opportunity to strengthen "European Corporate Governance" and to be a model for the rest of the world." Aims and Objectives: " EC Action Plan" The European Commission's an Action Plan which aims to be flexible in application, but firm on principles. This plan also seeks to help shape "international regulatory developments". The main objectives of this plan are; to strengthen shareholders' rights and protection for employees, creditors and the other parties with which companies deal, while adapting company law and corporate governance rules appropriately for different categories of company; to foster the efficiency and competitiveness of business, with special attention to some specific cross-border issues. Why a European Action Plan is needed? The European regulatory framework for company law and corporate governance needs to be modernised for the following reasons: The growing trend for European companies to operate cross-border in the Internal Market, the continuing integration of European Capital Markets, the rapid development of New Information and Communication Technologies, the forthcoming enlargement of the EU - New Member States, the damaging impact of recent financial scandals. The EC Action Plan is prioritised over the short-term (2003-2005), medium-term (2006-2008) and long-term (2009 onwards), and indicates which type of regulatory instrument should be used for each proposal, with approximate timescales. The Action Plan is based on a comprehensive set of legislative and non-legislative proposals, under the following headings: European Corporate Governance: "Harmonisation of the International & European Codes" The EC does not believe that a European Corporate Governance Code would offer significant added value but would simply add an additional layer between international principles and national codes. However, a self-regulatory market approach, based solely on non-binding recommendations, is not sufficient to guarantee sound corporate governance. In view of the growing integration of European capital markets, the European Union should adopt a common approach covering a few essential rules and should ensure adequate coordination of National corporate governance codes. The EC sees the following initiatives as the most urgent ones: Introduction of an Annual Corporate Governance Statement. Listed companies should be required to include in their annual documents a coherent and descriptive statement covering the key elements of their corporate governance structures and practices; development of a legislative framework aiming at helping shareholders to exercise various rights (for example asking questions, tabling resolutions, voting in absentia, participating in general meetings via electronic means). These facilities should be offered to shareholders across the EU, and specific problems relating to cross-border voting should be solved urgently; adoption of a Recommendation aiming at promoting the role of (independent) non-executive or supervisory directors. Minimum standards on the creation, composition and role of the nomination, remuneration and audit committees should be defined at EU level and enforced by Member States, at least on a "comply or explain" basis; adoption of a Recommendation on Directors' Remuneration. Member States should be rapidly invited to put in place an appropriate regulatory regime giving shareholders more transparency and influence, which includes detailed disclosure of individual remuneration; creation of a European Corporate Governance Forum to help encourage coordination and convergence of national codes and of the way they are enforced and monitored. Other corporate governance initiatives proposed in the EC Action Plan cover: Achieving better information on the role played by institutional investors in corporate governance; giving further effect to the principle of proportionality between capital and control; offering to listed companies the choice between the one-tier and two-tier board structures; and enhancing directors' responsibilities for financial and key non-financial statements. The Action Plan notes that there is a strong medium to long term case for aiming to establish a real shareholder democracy and that the EC intends to undertake a study on the consequences of such an approach. Capital Maintenance and Alteration: "PLLC ; Squeeze-out or sell-out rights" The EC considers that a simplification of the "1976 Second Company Law Directive", on the formation of Public Limited Liability Companies(PLLC) and the maintenance and alteration of their capital, would promote business efficiency and competitiveness without reducing protection for shareholders and creditors. A proposal to amend the Second Directive is therefore a priority for the short term. Such a proposal may include a partial relaxation of certain rules (applicable inter alia to contributions in kind, acquisition of own shares, or limitation/withdrawal of pre-emption rights allowing a company's shareholders to have first refusal on new shares issued). It could also include the introduction of "squeeze-out rights", meaning that the holder of a large majority of a company's securities could compel minority shareholders to sell their stock at a fair price, and of "sell-out rights" allowing minority shareholders to compel holders of a large majority of the capital to purchase their securities at a fair price. This would go further than the proposed "EC Directive on Takeover Bids", which offers those rights only in listed companies and only when there has been a takeover bid. Later on, an alternative regime not based on the concept of legal capital could be offered as an option to Member States. The EC will, in the medium term, launch a study into the feasibility of an alternative based on "a solvency test". Groups and Pyramids: "Holding & Transparency" Groups of companies, which are common in most Member States, are a legitimate way of doing business, but they may present risks for shareholders and creditors. More transparency can help minimise those risks. Initiatives aiming at improving the financial and non-financial information disclosed by groups are priorities for the short term. Such initiatives would aim to ensure better information on the group's structure and intra-group relations, as well as on the financial situation of the various parts of the group. The EC Action Plan advocates "a framework rule" to allow those managing a company belonging to a group to implement a coordinated group policy. It underlines the need for action against abusive pyramids, defined by the High Level Group as chains of holding companies whose sole or main assets are their shareholding in another listed company. Corporate Restructuring and Mobility: "Mergers & Transfer of Seat" European companies need to be able more easily to do business across national borders within the EU. The EC intends to present in the short term a new proposal for "a Tenth Company Law Directive" facilitating mergers between companies from different Member States, as well as a proposal for "a Fourteenth Company Law Directive" on the transfer of "seat" (a company's centre of activities and/or registered office) from one Member State to another. The Action Plan also covers: Simplifying some of the requirements under "the Third Company Law Directive (national mergers)" and "the Sixth Directive (national divisions)", and introducing squeeze-out and sell-out rights for all public limited liability companies. European Legal Forms & Disclosure Requirements The EC Action Plan includes a number of other proposals, as follows: Launching a feasibility study on the possible introduction of a European Private Company Statute, which would primarily serve the needs of SMEs active in more than one Member State; supporting in the short term the ongoing process aimed at the introduction of several European legal forms (European Cooperative, European Association, European Mutual Society), and considering in the medium term the development of a European Foundation; increasing the disclosure requirements applicable to a series of limited liability legal entities existing at national level. The EC has also published ten priorities for improving and harmonising the quality of statutory audit throughout the EU in order to ensure that investors and other interested parties can rely fully on the "accuracy of audited accounts" and to prevent "conflicts of interest". "Public Consultation" The EC Action Plan is open to public consultation for three months. The EC will publish a synthesis of the comments received which will be given adequate consideration. The EC intends to launch some initiatives this year or early next year. Simultaneously with the EC Action Plan, the EC has published ten priorities for improving and harmonizing the quality of statutory audit throughout the EU. The Action Plan will be considered by the European Parliament and the Council in order to revise and finalize it in the coming months. Finally, The EC Action Plan aims to "Modernise Company Law and Enhancing Corporate Governance" in order to strengthening shareholders rights, reinforcing protection for employees and creditors, and increasing the efficiency and competitiveness of business in Europe. Avrupa Şirketler Hukuku Eylem Planı, sermaye piyasalarında güveni artırıcı bir dizi kurumsal yönetişim adımını kapsıyor. Bu plan aynı zamanda yasal düzenlemelerle ilgili uluslararası gelişmeleri şekillendirmeyi de hedefliyor. Bu alanda bir Avrupa eylem planına gerek duyulmasının nedenleri ise şunlar: Avrupalı şirketlerin sınırlar ötesi faaliyetlerinin giderek artış göstermesi, Avrupa sermaye piyasalarının entegrasyonu, yeni bilgi ve iletişim teknolojilerinin hızla gelişmesi, AB'ye yeni üye olacak ülkelerle birlikte gerçekleşecek genişleme süreci ve son zamanlarda meydana gelen mali skandalların yıkıcı etkileri. Eylem Planı içerik olarak ise şu alanları kapsıyor: Uluslararası ve Avrupa uygulamalarının uyumlulaştırılmasını öngören Avrupa'da kurumsal yönetişim, sermayenin idamesi ve değişimi, holding şirketlerinde şeffaflık, şirket birleşmelerini ele alan kurumsal yeniden yapılanma ve hareketlilik, Avrupa çapında yasal kurum statüleri ve sınırlı sorumlu kuruluşların bilgi verme zorunlulukları. Kamuoyunun, henüz taslak halindeyken Eylem Planını üç aylık bir süreyle istişare etme şansı olacak. Sonuç olarak ortaya çıkan Plan hissedarların haklarını pekiştirecek, çalışanlara ve alacaklılara daha fazla koruma getirecek ve Avrupa iş hayatında verimliliği ve rekabeti artıracak. |