ecoDa’s Reaction to the Accountancy Europe Report "10 Ideas to make CG a driver of a sustainable economy”

Our vision

23.07.2019

In June, Accountancy Europe issued a report on “10 ideas to make corporate governance a driver of a sustainable economy”. This reports suggests changes in boards’ roles and practices and proposes legislative and non-legislative actions by EU and national policymakers and regulators.

The European Confederation of Directors Associations (ecoDa) has just expressed its thoughts and opinions in reaction to this report.

In its paper, ecoDa highlights the following points:

 • It is obvious nowadays that boards must ensure that companies create value for their shareholders and their relevant stakeholders in a sustainable manner, and that businesses cannot expect to remain competitive in the long run if they destroy the ecosystem in which they operate;

• When it comes to climate-related issues, the legislator can accelerate change;

• Boards should not be turned into a compliance body that only looks at the mechanical respect of the legislation;

• The management function as having a prime responsibility when it comes to sustainability;

• Boards have to choose CEOs who are aligned with the culture and the purpose of the company and who have a new, innovative mindset. This is certainly an area where boards have to exercise true leadership;

• It is important to reassert a proper balance of powers between boards and management and to set a crisp line between boards’ and management’s legal and fiduciary duties;

• The regulator could certainly stress the need for shareholders to be transparent on the corporate purpose they have set for the company;

• Sustainability cannot be addressed in isolation by the management, the board and the shareholders. It is definitely an issue that requires more dialogue among boards and investors;

• ecoDa does not see the added value of a European CG Code. The OECD CG principles are broad enough to accommodate the national CG specificities.

Have a look here at our detailed opinion: