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European Company Law and Corporate Governance

In recent years the issue of corporate governance has become a highly politicized policy area with great relevance for employees and society as a whole. At stake is the issue of who runs our companies and what strategies and goals these companies pursue. Since the 1990s corporate governance reform in Europe has been dominated by the ‘shareholder value’ model of the firm, which prioritizes the interests of shareholders. However, in the wake of the financial crisis, increasing dissatisfaction with this model is leading to the search for an alternative which gives stakeholders a stronger ‘voice’ in company affairs and focuses on long-term sustainability.

EU Company Law Package

This section is dedicated to an analysis of the EU Company Law Package ("CLP") and its transposition. The CLP, which was proposed by the European Commission in April 2018, is the most significant EU company law initiative since the 2003 Action Plan. It consists of two Directives: one on Digital Tools and Processes in Company Law and one on Cross-Border Conversions, Mergers and Divisions. 

This section contains three parts:

1) a brief description of the Company Law Package

2) GoodCorp research relevant to the transposition process

3) materials written by GoodCorp members in 2018 relevant to the CLP legislative process   

European Company Law

This section provides an overview of the European company law directives which have been passed to date. It also provides a more detailed discussion of those directives with provisions for worker information, consultation and participation, as well as current proposals for directives which would have particular significance for worker involvement. It also contains information on other issues in European company law, such as the European Cooperative Society or the European Private Company (SPE). Both have significant implications for employees’ rights.

Corporate Governance

The concept of corporate governance is defined in different ways. The narrow definition focuses on the control of management by shareholders. The broader definition looks at the role of stakeholders in making and implementing strategic decisions in the company. Corporate governance must be understood as a system in which there is an interplay of different regulations and market forces. Therefore corporate governance deals with multiple issues in the field of corporate law, securities regulation, corporate finance and industrial relations. In 17 of the 27 EU member states and in Norway employees are represented in the companies' supervisory or administrative board.

ECJ jurisprudence on the transfer of de facto company head offices

In recent years the European Court of Justice has, in a series of decisions, established some principles of law in the context of freedom of establishment (Art. 43, 48 EC Treaty) and the transfer of a company’s de facto head office to other member states that have had a profound impact on national regulation of legal conflicts (incorporation theory and seat theory). The leading cases in this context are the following: Daily Mail, Centros, Überseering, Inspire Art and Cartesio. The main outcome of these decisions is the possibility for companies to transfer their de facto head office to the member state of their choice.

GoodCorp Research Network on Corporate Governance

GoodCorp is a network of researchers and trade unionists dedicated to promoting a stakeholder approach to EU corporate governance and company law. Its three main activities are:

  • the exchange of information and opinions on current issues on the European corporate governance and company law agenda as well as on key developments in EU Member States
  • research and publication on policy options
  • advice and support for the European trade union movement on these issues