Companies will be forced to set out their corporate governance practices in their annual reports, if plans by the EU get the go-ahead.
Speaking in London last week, EU Internal Markets Commissioner Frits Bolkestein said companies would have to disclose the powers of their annual shareholders’ meeting as well as the work and composition of their boards and sub-committees.
The proposal comes as part of the EU’s corporate governance action plan, which was launched by the Commission in May.
“Companies will be obliged to be more transparent in the way they operate,” says Bolkestein. “They will have to demonstrate that they comply with accepted standards on corporate governance or explain why not.”
Bolkestein’s proposals will also force companies to state which national code on corporate governance they comply with and to explain themselves if they deviate from it.
