European Commission Appoints ISS To Lead Research Into Shareholders In Europe

The European Commission has commissioned a research report to understand an important corporate governance issue the proportionality between ownership and control. This study is part of the Commission's efforts to base any policy initiatives it might wish to take in

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The European Commission has commissioned a research report to understand an important corporate governance issue: the proportionality between ownership and control. This study is part of the Commission’s efforts to base any policy initiatives it might wish to take in this area on objective data.

Institutional Shareholder Services (ISS), the proxy voting agency, has been appointed to conduct the research in collaboration with law firm Shearman and Sterling LLP and the European Corporate Governance Institute (ECGI).

“The study represents the essential starting point for any further discussion on the adequacy of control to capital,” said Charlie McCreevy, European Commissioner for Internal Market and Services. It will provide a full, systematic picture of the essential features of Corporate Europe that the European public opinion is waiting for. Any discussion about how to move on, about possible initiatives in this area, needs to be based on sound facts.”

To date, says the Commission, there has been no comprehensive, factual analysis on control enhancing mechanisms in corporate governance. ISS will produce a profile of the structure of over 450 companies in 16 EU member states. It has also been asked by the EC to survey investors in European and international markets about their views on control-enhancing mechanisms. The report will include an overview of European regulatory frameworks by Shearman and Sterling plus a review of existing theoretical and empirical research by the ECGI, which will both contain a comparison with the situation in some key jurisdictions outside the European Union.

“With so many different legal frameworks and market practices across the European Union, this is no small exercise,” says Jean-Nicolas Caprasse, Managing Director of ISS Europe. Our remit is to conduct a comprehensive and factual analysis across the EU, which will lay the groundwork for informed decision making.”

“Shearman & Sterling is delighted to take part in this study on control enhancing mechanisms, which are widespread in Europe, the United States and throughout other jurisdictions,” adds Christophe Clerc, from the firm’s Paris office. “We have been advising on these issues for a long time, and we look forward to sharing our experience and collaborating with both our partners in this project.”

“The ECGI is enthusiastic about contributing the latest academic knowledge and thinking to this study,” says Marco Becht, Executive Director of the ECGI. This project is totally in line with our mission to further corporate governance through independent scientific research.”

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