European corporate governance is structured by EU corporate laws and the boards of directors are responsible for annual reports.
Corporate governance is the policy and methodology by which a business or corporation is directed, controlled, and directed toward growth and profit. Since the European Union (EU)’s inception, EU countries have come closer to their collective goals of creating a better environment for businesses to start, expand and reach their markets without the inequalities of national borders. The common or general features of European corporate governance have changed somewhat as shareholders, employees and corporate shareholders have adjusted to changes in laws and regulations. It is now possible for a company created in one European country to conduct business in other European countries without separate administration and record keeping costs for each additional country in which branches or subsidiaries have established offices and conduct business.
The European boards of directors are responsible for year-end reports in clear and understandable language on the company’s positions and prospects for the near future.
Some of the elements that govern European corporate governance are structured by EU company law. The boards of directors are responsible for the company’s annual reports and accounts in all EU member states. Audit committees oversee these reports and monitor the effectiveness of risk management systems, internal controls, and the independence of all consolidated audits. European corporate governance has shareholder rights protections, including mandatory calling of all general meetings, removal of prohibitions against electronic participation in meetings, permitted shareholder voting by mail, and the ability to ask questions of shareholders at any general meeting. European companies can be incorporated in a single country and merge, form holding companies and joint subsidiaries, without legal restrictions from 27 different countries, causing exorbitant legal fees and administrative costs.
Corporate governance is the policy and methodology by which a company is directed, controlled and directed towards growth and profit.
The Organization for Economic Co-operation and Development (OECD) in the late 1990s published a corporate governance principles document that most European countries referred to or converted into corporate legislation for their business communities. The basic principles of this document included that effective corporate governance structures should promote transparent markets, have consistency in the rule of law, and outline clear accountability among all supervisory, regulatory, and supervisory authorities. In addition, all shareholder rights and key ownership rights must be protected by governance structures and there must be express equality for all shareholders, including minority or foreign shareholders, among other provisions.
European corporate governance principles are adopted in most countries, including the recognition that ethical decision-making is not only good for public relations, but is good risk management practice and reduces lawsuits and damage. Directors develop codes of conduct for best governance practices, and all administrative staff and compliance provisions are strictly adhered to. The boards of directors are responsible for year-end reports in clear and understandable language on the positions of the company and also the prospects for the near future.