The 17th European Corporate Governance Conference took place on 15 December 2015 in Luxembourg under the auspices of the Luxembourg Presidency of the Council of the EU and the European Commission. Luxembourg's Minister of Justice, Félix Braz, and the European Commissioner for Justice, Věra Jourová, delivered the opening speech for this event dedicated to the influence of new forms of financing on corporate governance, the governance of subsidiaries in multinational groups and recent developments in corporate governance of credit institutions and investment firms.
Finding the balance between the different interests at stake
The Minister of Justice, Félix Braz, emphasised the importance of digital development in the context of corporate governance, which he believes is an 'important factor to take into account in our strategic thinking'. 'Digitalisation will improve corporate governance, in particular in terms of access to information or exercising shareholders’ rights, not to mention that it is an important cost-saving tool for our companies', he stated.
The Minister further recalled that digital development in the single market was essential for fostering the competitiveness of the European Union. And sound governance is essential so that companies are well-governed and sustainable, he specified in reference to the European rules on data protection and cybersecurity.
For Félix Braz, the challenge with corporate governance involves finding the right balance between the different interests at stakewhether these are the interests of managers, members of the board of directors, shareholders or other stakeholders. He added that the ambition of policy leaders should be to create a solid system of corporate governance that fosters performance as well as compliance.
The minister also highlighted the actions undertaken by the European legislator as being of 'major importance' as they reflect the European and global perspective of European businesses. He recalled that Parliament, the Commission and the Luxembourg Presidency had started trilogue negotiations on the revision of the shareholder rights directive, the aim of this revision being, according to the Minister, to improve the overall quality of corporate governance by encouraging shareholders to engage more with the listed companies they invest in, and to take a longer-term perspective of their investment.
Sustainable investments and new forms of financing to promote growth in Europe
The European Commissioner for Justice, Věra Jourová, recalled that a large number of measures concerning corporate governance had been taken at European level, citing for example the directive on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (the CRD IV directive), applicable since 2014, and announcing other 'stages' to come, such as the revision of the shareholders' rights directive and the proposal for a Directive on sole traders.
The Commissioner called for greater encouragement of sustainable investments to promote growth in Europe. She also emphasised the need to exploit all forms of financing to achieve this, including innovative sources of financing such as crowdfunding. 'These alternative forms of financing are useful because they help attract new investment', she said.
The Commissioner views the new forms of financing and corporate governance as being complementary. Against this background she recalled the existence of the European corporate governance framework which promotes investor confidence and shareholder protection and she called for compliance with this framework, whatever the methods of business financing.