EASD Corporate Governance Principles and Recommendations

Abstract

The European Association of Securities Dealers (EASD) is an international not-for-profit association of securities-related professionals (bankers, brokers, lawyers, accountants, PR and IR consultants, etc.) intent on creating favourable conditions for an efficient and competitive pan-European equity market, in the first place for growth companies. One of EASD's specialised committees is the Corporate Governance Committee. In May 2000, it issued its pan-European Corporate Governance Principles and Recommendations as part of a drive to confront the legal, social and cultural differences which confuse investors in Europe's fragmented marketplace and deter investment in companies lacking transparency in this area. EASD's corporate governance guidelines intend to provide a benchmark. They are founded on a comparative study of national and international best practice. Ten core principles are identified which can be found at the base of any successful corporate system. They address six main issues: the protection of rights and the fair treatment of shareholders; the designation and working of responsible and accountable boards; the duties and prerogatives of management; the provision of adequate and verified information; the appropriate handling of conflicts of interest; the existence of a proper market for corporate control. The recommendations that follow from the principles are more generally applicable than current national codes essentially geared to their home environment. They can normally be applied anywhere in Europe, while fully respecting national regulatory and social standards. The recommendations are also more specific and market-oriented that other international guidelines. They have a distinctly practical bent designed to facilitate understanding, application and assessment.