Company law - corporate governance - EUbusiness.com

EU company law rules also address corporate governance issues, focusing on relationships between a company’s management, board, shareholders and other stakeholders, and on the ways the company is managed and controlled.

Shareholders rights Directive 2007/36/EC sets out certain rights for shareholders in listed companies This Directive was amended by Directive (EU) 2017/828, which aims to encourage more long-term engagement of shareholders. The 2018 Commission Implementing Regulation (EU) 2018/1212 lays down minimum requirements as regards shareholder identification, the transmission of information and the facilitation of the exercise of shareholders rights.
Takeover bids Directive 2004/25/EC sets out minimum standards for takeover bids (or changes of control) involving securities of EU companies.
In the framework of the 2020 Capital Markets Union Action Plan, and more specifically, under the tasks envisaged under Action 12, aiming at facilitating shareholder engagement, the Commission committed to examining possible national barriers to the use of new digital technologies in the interaction between investors, intermediaries and issuers. A Staff Working Document was issued on 21.12.2022 (SWD(2022) 447 final), on the assessment and conclusions on this point of Action 12.

16 JANUARY 2023 – Commission staff working document on Action 12 of 2020 Capital Markets Union Action Plan

Corporate Sustainability Due Diligence

In line with the overall Commission objective of a just transition to a sustainable economy and a sustainable recovery after the COVID crisis, the European Green Deal Communication and Commission’s Recovery Plan confirmed the importance of embedding sustainability into corporate governance. The Directive on corporate sustainability due diligence (Directive 2024/1760) aims at better enabling companies to identify and mitigate actual or potential human rights and environmental adverse impact in the companies’ operation and value chains. The Directive entered into force on 25 July 2024.

Directive on Corporate Sustainability Due Diligence – Frequently Asked Questions

Corporate governance and remuneration for banks and investment firms

Specific rules on corporate governance and remuneration apply to banks and investment firms. The aim of these rules is to curb excessive risk taking, and thereby ensure financial stability.

Rules on corporate governance and remuneration for banks and systemic investment firms can be found in the Capital Requirements Directive(Directive 2013/36/EU as amended by Directive 2019/878/EU) and the Capital Requirements Regulation(Regulation No 575/2013 as amended by Regulation No 2019/876).
On 27 October 2021, the European Commission adopted a review of EU banking rules (the Capital Requirements Regulation (CRR) and the Capital Requirements Directive (CRD)). The review proposes, among other issues, a common set of standards and procedures to have more consistency across the EU for assessing the suitability of board members and influential managers (“key function holders”). For further information on the banking package adopted in October 2021: Banking package
Rules on corporate governance and remuneration for non-systemic investment firms can be found in the Investment Firms Directive (Directive 2019/2034) and the Investment Firms Regulation (Regulation 2019/2033).

So, while systemic investment firms remain under the banking rules, non-systemic investment firms are subject to a bespoke regime.

Prudential rules for investment firms

Expert groups and stakeholder platforms

Informal Expert Group on Company Law and Corporate Governance (ICLEG)

This group – consisting of company law professors and professionals – advises the Commission in the preparation of company law initiatives. The group was first set up in 2014 and renewed its membership in 2019 following a new call for applications in light of new challenges for company law and corporate governance. Find more information on the ICLEG group and on its work.