6.5 Conclusions

Recommendation 1: National corporate governance codes should contain a reference to their legal embedding as well as to the comply or explain principle, irrespective of whether this involves legislation or listing rules.

Recommendation 2: National corporate governance codes should provide clarity about which specific sort of code provision the comply or explain principle is applicable to.

Recommendation 3: When implementing the proposed amendments to Directive 2006/46/EC in the near future, the Member States need to mention the liability regulation that applies to the members of the administrative, management and supervisory bodies concerning the publication of the corporate governance statement.

Recommendation 4: The Member States need to be obliged by Directive 2006/ 46/EC to have three levels of supervision of code compliance (shareholders, external auditor and an assigned authority e.g. stock exchange authority) and the assigned authority that monitors formal code compliance must annually publish whether and how often sanctions are imposed.

Recommendation 5: Directive 2006/46/EC needs to be amended in the near future, providing more guidance and strengthening the comply or explain principle approach in the EU corporate governance framework.

Recommendation 6: Directive 2006/46/EC needs to oblige the Member States to ensure that corporate governance statements with list-wise explanations and references to the relevant code provisions not complied with are published.

Recommendation 7: Directive 2006/46/EC needs to oblige the Member States to ensure that corporate governance statements are published on the company's website for a period of at least five years.

Recommendation 8: Constantly paying attention to and creating awareness of the comply or explain principle in practice remains necessary in order to improve sufficient code compliance and also to prevent a decrease in code compliance in the future.

Recommendation 9: The percentage of insufficient explanations in the case of deviations from code provisions needs to be reduced to zero.

Recommendation 10: All Member States should have a standing corporate governance committee that functions as an important participant in the corporate governance discussion, notices developments and provides recommendations to the politicians or participants in the financial markets and facilitates annual code compliance research.

Recommendation 11: Whether the code compliance and the explanations for deviations from the national code of the listed companies are sufficient ought to be monitored independently and annually under the responsibility of the standing corporate governance committee, so the code can be updated or certain developments acknowledged. Next to the level of compliance, the specific deviations and provided reasons, a focus on the quality of explanations is also of importance.

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