As a result of the financial crisis the European Commission has been active in recent years in developing a new company law and corporate governance framework. This has been developed in response to what it saw as excessive risk-taking and short-termism. Therefore, in 2012, the European Commission brought forward an Action Plan on European company law and corporate governance which focused on three key themes: enhancing transparency in corporate governance, greater engagement with shareholders and supporting companies’ growth and their competitiveness.
Following up on this Action Plan, on 3 December 2015, the European Commission adopted a proposal to codify and merge a number of existing company law Directives. This proposal is currently being considered by the European Parliament and the Council. Furthermore, a new legal framework aiming to help shareholders exercise various rights has been developed and led to a revision of the existing Shareholders’ Rights Directive. In particular, the new provisions encourage transparent and active engagement by shareholders of listed companies. Specific requirements will apply to the remuneration of directors, the identification of shareholders, the facilitation of exercise of shareholders rights, the transmission of information, transparency for institutional investors, asset managers and proxy advisors as well as related party transactions.
In addition, the European Commission brought forward a legislative proposal for a harmonized insolvency law including early restructuring and second chance, hereby addressing barriers to the free flow of capital in Europe. This proposal will play an important role in the context of the Capital Markets Union and the current discussions on further measures to strengthen the Banking Union, which includes the proposal for a European Deposit Insurance Scheme.