A new initiative offers guidance for listed companies on how to achieve good corporate governance. It comes against a backdrop of major corporate scandals such as at the Italian food giant Parmalat and the Dutch retailer Ahold.
New corporate governance principles have been published by the European Corporate Governance Service (ECGS) bringing together best practice standards for large companies. The Corporate Governance Principles devotes separate chapters to shareholder rights, transparency, reporting and audit, directors, remuneration and other voting issues. It takes the view that CSR and corporate governance are interconnected and that social and environmental reporting, as well as the transparency with regard to the management of stakeholder relationships, are all aspects of good corporate governance.
The common set of principles builds on the national experiences of the organisation’s corporate governance research and advisory groups in France, Germany, Italy, Spain, Switzerland, Netherlands, UK and the Nordic countries.
Corporate ethics, or the lack of it, has been highlighted in recent years due to a series of corporate scandals such as at Parmalat and Ahold. The Commission has launched a new Action Plan aiming to modernise company law and enhance corporate governance in the EU. In March 2004 a new Commission proposal is expected which aims at revising the company law directive with regard to the statutory audit function. Later in the year, the EU executive is due to issue recommendations on the role of non-executive or supervisory directors as well as on directors’ remuneration.