BETTER FINANCE considers the aim of the EC Commission to establish a European framework on Sustainable Corporate governance in order to better hold directors accountable to long-term oriented stakeholders praiseworthy.
However, BETTER FINANCE warns against basing any future measures on the conclusions of a Study on directors’ duties and sustainable corporate governance due to its methodological flaws and misleading interpretation of the shareholder’s roles.
It is also important to wait for the outcome of important EU legislation (Taxonomy Regulation and the Non-Financial Reporting Directive) before intervening in national company laws and in order to avoid overregulation.
BETTER FINANCE believes the EC is right to address the issue of sustainable corporate governance. It should focus on lowering the barriers to long-term engagement of end-investors, i.e. EU citizens as individual investors and long-term and pension savers. They are indeed the ones bearing most of the risks (and parts of the rewards) of share ownership, either as direct or as indirect investors.