6.4.6 No EU corporate governance organisation discussing the comply or explain principle

Besides national standing corporate governance committees, some EU-wide coordination and discussions on corporate governance and, more specifically, the comply or explain principle would be advisable too. As part ofthe 2003 EU Action Plan on modernising company law and enhancing corporate governance, the EU Commission considered it a priority to encourage the coordination and convergence of national codes through regular high level meetings of the European Corporate Governance Forum (see section 1.2.1). This Forum met two or three times a year and was made up of representatives from Member States, European regulators, issuers and investors, other market participants and academics. The European Corporate Governance Forum was first set up at the end of 2004 and in 2008 its mandate was renewed. The Forum has issued a number of statements (such as on the comply or explain principle in 2006) and recommendations to the Commission. Furthermore, it annually published a report on its activities. Its task was to brief the Commission on the corporate governance developments in the Member States and simultaneously to evaluate these developments as well (Baums 2007, p. 3). However, the mandate of the EU Forum expired in July 2011 and, pending the answers to the EU 2011 Green Paper, the EU Commission is currently considering how best to involve experts in future developments in EU corporate governance. Moreover, the EU commission has set up new guidelines on expert groups with changes in the nomination procedures that make it difficult to continue the forum in its current setting (Minutes Forum Meeting on 9 June 2011).

Aside from these developments, the underlying study at all times argues for such an EU-wide expert group that briefs the EU commission on the corporate governance developments in the Member States and evaluates these developments as well. Section 1.2.2 above states that a strength of the comply or explain principle is that its application stimulates the corporate governance discussion and paves the way for necessary changes. This is also the strength and aim of an EU-wide expert group that coordinates and facilitates this discussion. In addition, it is believed helpful to the national corporate governance committees that they have a forum through which they can meet and discuss. Imagine a rather inexperienced national corporate governance committee that contacts the more experienced Dutch corporate governance committee with as a result perhaps some national cross-references. Section 6.2 above argues for an improved variety of governance systems based on national cross-references, or in other words: the systems will improve by learning from each other, in which respect an EU-wide expert group would be a good facilitator.

Recommendation 12: An EU-wide expert group focusing on corporate governance should facilitate, coordinate and stimulate the corporate governance discussions, an important topic ofwhich is, ofcourse, the application of the comply or explain principle, and will thus contribute to the achieving of an improved variety of governance systems based on national cross-references.