As the European Commission has proposed a revision of an EU directive on shareholders' rights, the European Socialists and Democrats today in Brussels called for a bolder reform strengthening employees and other stakeholders' participation.
During a public hearing at the European Parliament with trade unionists, academics, and investors, the S&D members expressed their support for the Commission's decision to reform the shareholders' rights directive. However, they also pointed to the need for more radical and innovative measures to steer EU companies' decisions towards long-term and sustainable goals.
Evelyn Regner MEP, S&D co-ordinator for the legal affairs committee, said:
"We need a wider and bolder approach to corporate governance at European level, which recognises the value of stakeholders' involvement. Stakeholders, and in particular workers, have a natural interest in ensuring long term sustainability of companies. Therefore their role should be strengthened. Provisions for minimum standards on employee involvement in case of the application of EU company law would steer companies' decision making processes towards long-term value and would create more legal certainty for businesses. In this context workers' board level representation constitutes an important element that should be taken into adequate consideration."
S&D MEP Sergio Cofferati, European Parliament's rapporteur for the shareholders' rights directive, added:
"We welcome the proposal for a revision of the shareholders' rights directive. It is a useful first step in order to promote long-term decision-making for companies and investors. We also welcome the provisions on directors' remuneration, including shareholders' say on pay, greater transparency and a stronger link with the performance of companies. These measures are needed in order to avoid excessive directors' remuneration and to ensure that managers' pay is consistent with their long term performances.
"However this proposal is not enough: in order to fix the shortcomings of European corporate governance, we need a bold and comprehensive approach. This includes further stakeholders' involvement, in particular employees, greater transparency and a stronger corporate social responsibility".
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