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8/13/2019 CG in Europe
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Corporate Governance(CG) in Europe
Arif Hartono, SE. MHRM. PhD.
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European Phenomena
Declining the barriers of capital markets
with the adoption of Euro
The internationalization of cross-bordersportfolios
Technological advance
CG becomes more important
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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
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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
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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
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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
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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
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DenmarkFeatures Key Characteristic
Main business form public or private companies limited by
shares
Predominant ownership Institutional & foundation ownership
Legal system Civil law
Board structure Dual
Important aspect Many shares have multiple voting ri
rights
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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
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FranceFeatures Key Characteristic
Main business form Public or private companies limited by
shares
Predominant ownership States, institutional, individual
Legal system Civil law
Board structure Unitary (but other structure possible)
Important aspect Many shares have multiple voting ri
rights
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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
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ItalyFeatures Key Characteristic
Main business form Limited liability companies;
partnership
Predominant ownership non-financial/holding companies;
families
Legal system Civil law
Board structure Unitary
Important aspect Board of auditors required
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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
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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