Control Enhancing Mechanisms in Corporate Governance

Conference on European company ownership arranged by Copenhagen Business School and ECGI.

In June 2007 the European Commission published a study on shareholder democracy in EU listed companies. What are the positions on the study among European and national policy makers, academics, industry representatives and investors?

Background

In 2006 the European Commission launched an external study on shareholder democracy. The study has now been published and has identified existing deviations from ‘One share one vote’ in listed companies across the EU. Moreover, it has provided an in-depth analysis of the relevant regulatory framework at Member State level and has also evaluated the economic significance and potential impact on EU financial investors of these deviations.

The findings of the EU study

The study finds that, on the basis of the academic research available, there is no conclusive evidence of a causal link between deviations from the proportionality principle and either the economic performance of listed companies or their governance. However, there is some evidence that investors perceive these mechanisms negatively and consider more transparency would be helpful in making investment decisions.

The study was carried out by Institutional Shareholder Services Europe (ISS Europe), the European Corporate Governance Institute (ECGI) and the law firm Shearman & Sterling LLP. Internal Market and Services Commissioner Charlie McCreevy said: “The study provides a useful factual background to the issue of proportionality between capital and control – known as the ‘one share, one vote’ issue. Previously we didn’t have a clear picture of how this issue affects European listed companies and whether it has an impact on their economic performance. Now that these facts are on the table we will examine, with an open mind, the question of whether there is a need for Commission action in this field”. The study will provide input for an impact assessment that the Commission will be carrying out between now and autumn 2007.

About the conference

The conference will use the European Commission study as the basis for discussion bringing contrasting views on the issues from European and national policy makers, academics, industry representatives and investors. The expected outcome will be input to the European Commission’s ongoing impact assessment and proposals and recommendations for further research.

There will be three sessions. The first session will focus on the study from the European Commission. The second session will focus on industry and investor reactions and the third session will have an academic perspective.

The speakers include:

Marco Becht (ECGI)

Morten Bennedsen (CBS and ECGI)

Mike Burkart (Stockholm School of Economics and ECGI)

Jean-Nicolas Caprasse (ISS)

Christophe Clerc (Shearman and Sterling)

Pierre Delsaux (European Commission)

Daniel Ferreira (London School of Economics and ECGI)

Julian Franks (London Business School and ECGI)

Peter Montagnon (ABI and ECGF)

Jaap Winter (DeBrauw Blackstone & Westbroek, ECGF and ECGI).

Programme

The programme can be downloaded on www.cbs.dk/cem

Registration

Sign up on www.cbs.dk/cem or www.ecgi.org/conferences/cbs2007/registration.php

Participation is free of charge, however the number of attendees is limited. European and national policy makers, academics, industry representatives, investors and journalists will be prioritised in case of overbooking.