Europe: corporate governance green paper - FRC submission published

The European Commission's consultation on the corporate governance framework in Europe closed last week. The UK's Financial Reporting Council published its submission last Friday: see here (pdf). In its submission the FRC states that the Commission's priority should be to make existing approaches work better rather than introduce radical change. In this regard, the FRC argues that comply or explain should be retained but that it should be made to work more effectively, particularly with regard to the role played by shareholders.

Attached to the FRC's submission is a copy of a paper titled Effective Corporate Governance, in which the FRC sets out what it believes are the essential components for promoting effective corporate governance. These include: regulation, where necessary, to establish basic standards; codes, to encourage best practice; and shareholder rights and responsibilities to promote accountability. The paper also identifies the benefits of codes.