Lutgart Van den Berghe at the European Commission organized a conference on EU CG in XXI century on June 26 2017



Following the shareholders’ rights directive, the European Commission organized a conference on EU CG in XXI century. Lutgart Van den Berghe (ecoDa Policy Committee’s Chair) made a very good presentation where she highlighted the different following points:

  • Governance is much more than shareholders’ focus even more if we want to cope with all the new challenges,
  • Beside boards and shareholders, one should not neglect the third pillar: the management. Up to now, there are not a lot of developments on what managers’ responsibility should be with regards to stakeholders’ interest. Their remuneration should integrate this dimension.
  • The King IV Report states that boards’ role is about inclusiveness and making trade-offs.
  • We can’t ignore that the EU shows a decreasing trust in boards; they tend to give more powers to shareholders even if they meet only once a year and even if their agenda is already full.
  • Regulators also tend to neglect the different existing shareholders’ models in Europe (controlling shareholders model where independent directors have a key role to play versus disperse share-ownership where long-term sustainability is not really the priority)
  • It is important to clarify directors’ duties and to check if they are in line with the corporate interests.
  • As long as companies contribute to the society, investors remain ready to invest in (that’s typically the case with the pharmaceutical sector where investors still believe in the purpose beside negative cash flows).