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Latest developments

This section gives the opportunity to keep up to date in the field of EU Company Law and Corporate Governance.

The European Commission proposes a new directive on the protection of trade secrets

On 28/11/2014 the European Commission issued a proposal for a 'Directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure'. The objective of the initiative is to ensure that the competitiveness of European businesses and research bodies which is based on undisclosed know-how and business information (tradesecrets) is adequately protected.

Since the directive may have influence on worker rights to information and consultation in cases of merger of companies it is on the radar of trade unions.

R.I.P. SPE – Welcome to the SUP!

The SPE (Societas Privata Europaea), also known as the European private company, has been controversial since it was proposed by the European Commission in 2008. Although the Commission recently announced the withdrawal of this proposal, supporters of worker participation are worried about rumors that a new proposal on an SUP (Societas Unius Personae) will be forthcoming soon.

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Compromise between the European Parliament and EU Member States on Nonfinancial Reporting

A reported compromise between the European Parliament and EU Member States is the latest twist in the battle for an EU directive on nonfinancial (i.e. social and environmental) reporting. The compromise, which was reached at the end of February, represents a further watering down of requirements on companies relative to the Commission’s draft directive from last year.

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Review Process on OECD Principles of Corporate Governance Started

The OECD launched the process of reviewing its Principles of Corporate Governance last month (March 2014). The target is to develop a revised set of principles within a year. This review procedure is an opportunity to strengthen the role of workers as a key “stakeholder” in corporate governance these Principles.

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European Parliament adopts resolution on employee financial participation

Following the approval of a draft report (see WP News Bulletin 2/2013), on 14 January 2014 the European Parliament adopted a resolution on employees’ financial participation (EFP) in companies’ profits. The resolution highlights the potential of EFP to ‘bring stability, development and growth while reducing risks of over-expansion leading to job losses’, especially if these effects were ‘enhanced by stable and functioning worker involvement institutions’.

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Major Commission-Sponsored Conference on Employee Share Ownership

A major conference on employee share ownership financed by the European Commission entitled “Taking action: Promotion of employee share ownership: Debating concrete policy options” took place in Brussels on 30 January 2014. This was a major one-day conference on employee share ownership, organised by Professor Jens Lowitzsch of University of Viadrina at Frankfurt (Oder)/Freie University, Berlin, and attended by around 130 delegates from academia, employer associations, and national government bodies, but very few from trades unions.

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Revision of EU Merger Control Rules

As of 1 January 2014 the EU procedures on merger control have been modified. More proposed mergers will now be eligible for a “simplified” procedure for approving mergers. In the long run, however, a discussion on the inclusion of social and other criteria in approving mergers is needed.

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Future of European Private Company (SPE)?

In the REFIT-Communication (page 18), the European Commission includes its proposal on the statute of a European Private Company in the list of proposals it intends to withdraw. The Commission thereby draws the lessons from the several year long unsuccessful discussions between member states around this potential new European company form.

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Implementation Study on Cross-Border Mergers released

The European Commission has just released an external study on the implementation of the Cross-Border Mergers Directive (CBMD) in the EU and EEA Member States. While the study claims that the CBM Directive is a success overall, nevertheless further policy actions are needed. With regard to employee participation, the study identifies a number of problems and outlines some options to deal with these.

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Consultation on Single-member limited liability companies closed

The European Commission public consultation on single-member limited liability companies closed on 15 September 2013. It took place in the context of the 2012 EU Company Law Action Plan as well as the repeated attempts by the European Commission to create a European legal form for SMEs and to deregulate the small company sector.

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Cross-border transfers of registered offices of companies: results of consultation

In September the European Commission published a Feedback Statement on the results of a public consultation it organized on the issue of cross-border transfers of registered offices of companies. On the issue of what provisions should be made for employee participation in the case of a transfer, 40% of the respondents favoured a solution based on the SE legislation, 20% the Cross Border Mergers Directive (CBMD), and 40% were for another solution.

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A step but not a leap: The Commission's new proposal for non-financial and diversity reporting

Earlier this week the Commission released its long-awaited proposal for a Directive regarding disclosure of non-financial and diversity information. The Commission’s explanation of the motivation for this proposal is straightforward: “...only a limited number of EU large companies regularly disclose non-financial information, and the quality of the information disclosed varies largely, making it difficult for investors and stakeholders to understand and compare companies’ position and performance.” 1

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Consultation on Long-Term Finance

On 25 March 2013 the European Commission published a Green paper on the long-term financing of the European economy and announced a three-month public online consultation on this issue. This consultation addresses the causes of short-termism and possible measures that could be taken to encourage more long-term investment in Europe.

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Commission consultation opened on the cross-border transfer of registered seats

DG Markt has started an online consultation on the cross-border transfer of registered seats as part of its new Action Plan on corporate governance and company law.

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Conference on the new Action Plan announced

EcoDa (the European Confederation of Directors' Associations) is organizing a conference in Brussels on 4 Feb 2013 on the new EU Action Plan on corporate governance and company law.

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New EU Action Plan on company law and corporate governance plans stick to shareholder paradigm

In December the European Commissioner published the long-awaited EU Action Plan on European Company Law and Corporate Governance. The sixteen proposals made contain little in the way of correcting the power imbalance that currently exists between shareholders on the one hand and stakeholders (particularly employees) on the other hand in the governance of European companies.

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New EU Action Plan suggests no major revisions of the SE legislation

The new Action Plan on EU Company Law and Governance, published on 12 December 2012, contains no proposal for revising the SE Directive or Regulation. Instead, it is stated that the Commission will try to promote and improve "awareness awareness of the European Company (SE) and the European Cooperative (SCE) Statutes."

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Irish Presidency Priorities for EU company law

There is now a dedicated website for the Irish Presidency, which includes priorities for EU company law and corporate governance.

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EP debates Takeover Bids Directive

The implementation of the Takeover Bids Directive was discussed again in the EP committee on legal affairs on 18 December 2012.

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EU Insolvency Regulation – New Proposal

The European Commission has just announced a proposal amending the Regulation on Insolvency Proceedings.

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Proposal for a 40 per cent gender quota for company boards adopted

On 14 November the European Commission adopted a revised proposal for a draft Directive which sets a minimum objective of 40 per cent by 2020 for members of the under-represented sex for non-executive members of the boards of publicly listed companies in Europe

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Series of European Parliament commissioned studies published

The European Parliament commissioned three studies, which were discussed at the 10–11 October Committee on Legal Affairs (JURI) meeting:

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Single Market Act II launched – ‘Together for new growth’

On 3 October Commissioner Barnier presented the Single Market Act II with 12 new immediate priorities ‘which the Commission will focus on to support growth, employment and confidence in the Single Market’.

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Commission publishes summary of European Company Law consultation

The European Commission has published a summary of the results of its recent consultation on the future of European Company Law.

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EU Takeover Directive Study and Commission Report Published

The European Commission has released the study on the functioning of the Takeover Bids Directive, which was undertaken by Marccus Partners and the Centre for European Policy Studies (CEPS).

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European Parliament passes resolution on the future of European company law

The European Parliament has positioned itself in the debate on the future of European company law in a resolution passed on 14 June 2012.

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Consultation on the future of insolvency law

DG Justice has opened a public consultation on the future of insolvency law, which will be running until 21 June 2012.

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European Commission proposal on “say on pay”

EU Internal Market Commissioner Barnier submitted a proposal to the European Commission on giving shareholders a right to vote on the remuneration of board members (“say on pay”).

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ETUC response to online consultation on European Company Law

The ETUC has submitted a response to the European Commission's online consultation on the Future of European Company Law.

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EP Seminar on European Company Law and Workers' Rights

The Group of the Progressive Alliance of Socialists & Democrats (S&D) in the European Parliament is organizing a seminar on European Company Law and Workers' Rights on 11 April 2012 in the European Parliament.

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EP report on European Cooperative Society (SCE)

The European Parliament adopted a resolution approving an own-initiative report on the SCE on 13 March 2012.

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ETUC Resolution on the Future of European Company Law

At its meeting on 6/7 March 2012, the Executive Committee of the European Trade Union Confederation (ETUC) adopted a resolution on the Future of European Company Law: toward sustainable governance.

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European Commission Proposes European Foundation Statute

The Commission presented on 8 February 2012 a proposal for a European Foundation Statute. The goal of the proposal is to make it easier for foundations to operate across national borders in the EU.

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EP Hearing on Employee Shareholding Rescheduled to 22 March

A public hearing in the European Parliament on employee shareholding has been rescheduled for 22 March 2012.

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European Commission Proposes European Foundation Statute

The Commission presented on 8 February 2012 a proposal for a European Foundation Statute. The goal of the proposal is to make it easier for foundations to operate across national borders in the EU.

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EP resolution on 14th company law directive

On 2 February, the European Parliament adopted its third resolution containing recommendations to the Commission for the adoption of a 14th company law directive on the cross-border transfer of company seats.

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Policy Brief: 'Letter-box companies and abuse of the posting rules: how the primacy of economic freedoms and weak enforcement give rise to social dumping'

Policy Brief by Jan Cremers (University of Amsterdam)

Date of publication: 2014

This policy brief demonstrates how the emphasis on the primacy of economic freedoms has negatively affected the application of EU social security rules and the working conditions of posted workers. It also discusses the legal ambiguities accompanying the notion of 'genuine undertakings' and some recent cases of abuse of the freedom of establishment through the spread of letter-box companies. Finally it formulates policy recommendations for clear, transparent regulation, tighter controls and closer cooperation between national law-enforcing authorities.

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Long-term investment and the Sustainable Company: a stakeholder perspective. Vol. III

Publication date: 2015

Number of pages: 237

Edited by: Sigurt Vitols (ETUI)

Sustainable company III cover

The onset of the Great Financial Crisis in 2007/8 has triggered a widespread debate about the causes and the social and environmental consequences of the lack of long-term investment around the world. This volume, the third in the Sustainable Company book series produced by the GOODCORP network of academic and trade union experts on corporate governance, presents a ‘stakeholder’ approach to the problem. The analysis and policy prescriptions presented here go beyond mainstream economic analysis by highlighting the need for major changes in the way resources are saved, distributed and invested in the interests of a sustainable and just economy and society.

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