The European Call for More Shareholders’ Engagement: State of Play and Way Forward

Abstract

Building up on recent European works, ie, the green paper on corporate governance in financial institutions, the green paper of the European Commission on the European corporate governance framework and the report of the reflection group on the future of European company law, this article first suggests that more and more voices are favoring shareholders value maximization with a long-term view as corporate objective. It however slightly qualifies the (global and European) plea for corporate engagement by (primarily) institutional investors. It goes on to summaries some suggestions already made by European bodies for the promotion of long-term commitment by institutional investors and draws the attention to remaining concerns. Lastly, it recommends drafting a European stewardship code for institutional investors, and especially pension funds, insurance companies and other collective investment vehicles. That code should be complemented by a regulation which should require compliance with the code.