National systems or European harmonisation of corporate governance? Approach to the consequences of the application of corporate governance principles during a takeover bid in the European Union

Abstract

This paper tries to identify the different approaches to corporate governance in Europe and possible changes linked to the 13th directive proposal on takeover bids. After an explanation of what is corporate governance, the paper will expand on what it implies in different states. The debate between authors like Berle and Freeman is not simply a rhetorical one. The means by which one considers what a company is and what its aims are, have consequences for the management structure and the way it defines strategies to reach corporate goals. In the European Union, this debate is currently hotly contested, particularly the takeover bid topic. The EEC proposal on takeover bids is directly inspired by the assumption that the primary duty that directors must seek to fulfil is the creation of shareholder value. The text makes a choice to eradicate companies' defences and requires neutralisation of directors. There is no possibility to act in the name of the ‘interest of the company’ but the European Parliament added some important elements on this key issue. The European Commission must adopt an ‘enlightened’ view of corporate governance in its future proposals; to integrate alternative views of company governance is the best way to implement an integrated financial market coherent with the European social project.