ACCA Welcomes New Corporate Governance Law Issued by European Commission
ACCA (the Association of Charted Certified Accountants) welcomes new company law and the corporate governance package adopted by the European commission. It is presumed that the new company law will improve shareholder’s involvement and corporate governance reporting.
The recent changes in package include the revision of the shareholders’ rights directive.
According to the head of technical department of ACCA, John Davies: the recent revision of the shareholders’ right directive will increase the transparency of the shareholder identification and oversight shareholders’ along with the oversight director’s remuneration and related transactions.
In recently included revision, the proposed “say on pay” gives the opportunity to shareholders to influence and approve the company’s remuneration policy. This is a very important aspect in company law where the shareholders can decide the company’s pay practice and can contribute to the sustainable growth of the company. ACCA believes that the recent law definitely reforms the context of shareholder benefits as well as sustainable and transparent business. ACCA believes that the recent changes will improve the shareholder’ commitment to improve the operating conditions of the organization.
This legal initiative can’t restrict the company’s financial choice or freedom, rather it gives the freedom to choose the standard provision with regular corporate governance code. This initiative gives a strong call to the shareholders in making their own decisions about the company’s operations. Additionally, it opens new doors for companies to seek recommendations regarding different matters.
John Davies further explains: the recent changes will ensure smooth cross border business operations. The new regulation creates a standardization of company’s law requirements across the European Union that will create more specific business operations in different countries with similar rules. This is a step ahead to establish cross border business activities. He also mentioned that it is equally important for the companies to protect their rights and interests in order to protect the rights of the investors.
John Davies concludes: now it is important to create an efficient company law and corporate governance framework for sustainable and transparent business. ACCA appreciates the low cost legal solutions for companies to enhance the competitiveness and stable performance for a long time.