CG in Europe

8/13/2019 CG in Europe

1/7

1

1

Corporate Governance(CG) in Europe

Arif Hartono, SE. MHRM. PhD.

2

European Phenomena

Declining the barriers of capital markets

with the adoption of Euro

The internationalization of cross-bordersportfolios

Technological advance

CG becomes more important


2/7

2

3

Predominant Bord & Leadership Stucure

Member State Board Struture Employee role

in supervisory body

Austria Two-tier Yes

Belgium Unitary* No

Denmark Two-tier Yes

Finland Unitary* Articles may provide

France Unitary* Articles may provide

(and advisory)

Germany Two-tier Yes

Greece Unitary* No

Ireland Unitary No

4

Predominant Bord & Leadership Stucure

Member State Board Struture Employee role

in supervisory body

Italy Unitary** No

Luxembourg Unitary Yes

Netherlands Two-tier AdvisoryPortugal Unitary** No

Spain Unitary No

Sweden Unitary Yes

UK Unitary No

*Other structure also available **Board auditors also required


3/7

3

5

Supervisory & Management Board

Supervisory Board Management Board

Members are elected by Members are appointed

shareholders; members are by the spervisory board

nominated by employees

Controls the direction of Manages the business

the business

Oversees the provision of infor- Provides various financial information & that appropriate system mation of appropriate systems

have been put in place by the e.g. a risk management system

management board

6

GermanyFeatures Key Characteristic

Main business form Public or private companies limited by

shares

Predominant ownership Financial & non financial companies

Legal system Civil law

Board structure Dual

Important aspect Compulsory employee representation

on supervisory board


4/7

4

7

Germany The Cromme Code

Shareholders & the general meeting

Cooperation between the management &the supervisory board

Management board

Supervisory board

Transperancy Reporting & audit of the annual financial

statements

8

DenmarkFeatures Key Characteristic

Main business form public or private companies limited by

shares

Predominant ownership Institutional & foundation ownership


Board structure Dual

Important aspect Many shares have multiple voting ri

rights


5/7

5

9

DenmarkNorby Committee

The role of shareholders & their interaction with themanagement of the company

The role of the stakeholders & their importance to thecompany

Openness & transperancy

The task & responsibilities of the supervisory board

Composition of the supervisory board

Remuneration of the members of supervisory board & the

executive board Risk management

Audit

10

FranceFeatures Key Characteristic

Main business form Public or private companies limited by

shares

Predominant ownership States, institutional, individual


Board structure Unitary (but other structure possible)

Important aspect Many shares have multiple voting ri

rights


6/7

6

11

France Bouton Report

Role & operation of the board directors

Board directors composition

Evaluation of the board directors

The audit committee

Compensation committee

Nominating committee

Social & environmental issues

12

ItalyFeatures Key Characteristic

Main business form Limited liability companies;

partnership

Predominant ownership non-financial/holding companies;

families


Board structure Unitary

Important aspect Board of auditors required


7/7

7

13

Italy The Preda (2) Report Role of the board directors

Composition of the board directors

Independent directors

The chairman of the board of the directors

Information to be provided to the board of directors

Confidential information

Remuneration of directors

Internal control

Transaction with related parties Relations with institutional investors & other shareholders

Shareholders meetings

Members of the board of auditors

14

Concluding remark

There seems to be a concensus on certain

key issues in European CG; e.g. More

transperancy & disclosure, accountability of

the board, & the independence of at least a

portion of the directors

CG in Europe

Documents

Transcript of CG in Europe