A European Perspective on Corporate Governance

Abstract

Corporate governance has become a topical issue in many European countries in recent years. Despite there being much conventional wisdom about the different systems of corporate governance, many questions remain on how the European scene will evolve. This article reviews the divergences in both the practice and philosophy of corporate governance in Europe, summarizes the regulatory policy considerations at the national and European levels, and speculates on the possible evolution of the systems. Because of market integration and shifts in pension financing and privatizations, a greater role for the market can be expected in corporate control. The article reveals a contradiction between the globalization of markets, of which also the EU’s single market is an example, and the insular character of the national discussions, as can be observed in the results and recommendations of corporate governance committees in France, the Netherlands and the UK. The latter is reflected in the debate on company law harmonization measures at EU level, which have been held up for a long time on the grounds of ‘subsidiarity’. As a way out of this deadlock, the article proposes that industry, or the European Commission, should come forward with a recommendation for a European‐wide self‐regulatory code of best practice in corporate governance, to underline the European dimension of the debate.