Earlier this week the European Internal Market Commissioner, Michel Barnier, delivered a speech titled Re-establishing Responsibility and Accountability at the Heart of the Financial System: see here (pdf). This speech provides a very interesting insight into the Commissioner's current thinking on corporate governance and the actions he believes necessary at European level. For example, with regard to the board of directors, Mr Barnier observed:Ability and willingness of directors to exercise effective control over senior management must be improved. In particular for non executive directors. Boards of directors too often failed to act as the principal decision-making body of the company. Or dare challenge decisions and practices. That must change in future. The right balance between independence and skills needs to be struck. I want Directors to dedicate more time to their functions. This can be achieved by limiting the number of directors' memberships in boards. Their expertise must be evaluated more widely, for instance by extending the 'fit and proper test'. I also think more effort needs to be made for a more diverse boardroom. It is always difficult to take good decisions. But debate and different views help us get there. And diversity in all forms creates the right conditions for a real exchange of views".
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