Carolyn Dittmeier
Download
1 / 32

Carolyn Dittmeier Trends in EU Corporate Governance: The Search for Stability - PowerPoint PPT Presentation


  • 371 Views
  • Uploaded on
  • Presentation posted in: General

Carolyn Dittmeier Trends in EU Corporate Governance: The Search for Stability. Trends in EU corporate governance. Is the stakeholder community satisfied with. Corporate governance perfomance. NO. The European Commission and Parliament debates From shareholders responsibilities

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha

Download Presentation

Carolyn Dittmeier Trends in EU Corporate Governance: The Search for Stability

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Carolyn Dittmeier

Trends in EU Corporate Governance: The Search for Stability


Trends in EU corporate governance

Is the stakeholder community

satisfied with

Corporate governance

perfomance

NO


The European Commission and Parliament debates

From shareholders responsibilities

to board conduct

to internal governance


The Issues

Company structures

Comply or explain versus EU Regulation

Proportionality

Shareholder responsibilities

Short termism

External Supervisory role

External Audit

Board

Strategic Risk Management

Internal audit


The current legislative proposals and debates at the European Commission and Parliament

Corporate Governance in Financial Institutions

Lessons from the crisis: Audit Policy/Statutory Audit

EU Corporate Governance Framework / Company Law


Company Structures

Is the Two Tier System better than the Board / Audit Committee structure


EU Regulation versus Comply or Explain of National codes

EU Corporate Governance Green Paper

Over 400 responses

Please NO Regulation!


Comply or Explain

Comply AND Explain


National CG Codes

Need for convergence


90% of Corporate Governance Codesrequire or recommend Internal Audit, butfewproviderequisitestoensureitseffectiveness

Corporate Governance Codes and Internal audit

Required

Recommended

Germany

Austria

Finland

Luxemburg

Belgium

Hungary

France

Malta

Bulgaria

Romania

United Kingdom

Ireland

Greece

Slovakia

Cyprus

Italy

Netherlands

Slovenia

Czech Republic

Latvia

Spain

Denmark

Estonia

Sweden


Proportionality: No one size fits all!

But how to measure proportionality


Notonesizebutfitforall

June 6 at the European Parliament:

Finding an EU solution to achieve a truly effective corporate governance regime, while allowing entities the flexibility in selecting their own CG structures

MEP Evelyn Regner, European Commission Director UgoBassi,, Deputy Director General Assonime (EuropeanIssuers) Carmine Di Noia, ECIIA President Carolyn Dittmeier


Increase Shareholder responsibilities

  • Shareholder approval for more transactions

  • Mandatory annual elections of board members with criteria

  • Control on Related party transactions


  • Short Termism – Increase Long term viability

  • Corporate statutes to reflect overall goal of long term viability

  • Corporate governance reporting on long term objectives

  • Abandon Quarterly Reporting?


Increase Supervisors/regulators involvement

  • Enhanced, two-way communication between auditors and supervisors with alert system

  • Board competency test

  • Monitor CG Resports

  • Oversight of conflict of interests

  • A bigger stick


External Audit – Lessons from the Crisis

  • Independence, independence and independence

  • Rules for independence and quality under supervisory body

  • Audit Committee responsible

  • Almost eliminate non-audit services

  • Audit firms to publish accounts, methods, fees

Impact assessment


External Audit – Lessons from the Crisis

  • External audit role is integral to corporate governance

    • Include risk reports of the entity / check on excessive risk

    • Social responsibility role

    • Right to be heard at general meetings

    • Duty to report to Supervisor


ECIIA’s Clarificationto key EuropeanParliamentMember


The issues

Company structures

Comply or explain versus EU Regulation

Proportionality

Shareholder responsibilities

Short termism

External Supervisory role

External Audit

Board

Strategic Risk Management

Internal audit


Stronger Board of Directors crucial:

Composition, Competencies, Compensation

  • Fit and proper test by legislation -regular external evaluation

  • Separate role of the CEO and Chairman

  • Strict remuneration policy based on long-term performance

  • Diversity

  • Strategic Risk Management


  • Directive 2006/43/EC86-Article 41

  • “the Directive’s most frequently non-transposed article”


Strategic Risk Management

  • Annual report on risk, risk management systems and the adequacy of internal control

  • Annual Board approval of risk model assessment

  • Establish Risk Committee or Risk function

  • Adopt /describe framework


ECIIA Guidance

ECIIA & Ferma joint papers: ReinforcingBoard And Senior Management competencies on risk management, internal control and internal audit

Part II

Senior Management Focus

December 2011

Part I

Board Focus

2010


Internal Audit

The time is right for Assurance


Explicit potential Impacts on internal audit?

  • “The two facets of auditing – internal and external – to be clearly circumscribed in law” (Financial sector)

  • “Efficient, regular dialogue”

    • IA to inform External Auditor who reports to Supervisory authority?

  • Risk model assessment

    • CSR and CG hand in hand


Implicit potential Impacts on internal audit?

Independence

Quality Assurance

Assurance methodology

Advisory role


ECIIA Guidance

  • Corporate Governance Insights

  • Issued May 2012

  • Reinforcing Audit Committee oversight regarding global assurance

  • A single defined governance framework for global risk management and assurance

  • The Three lines of Defence model for global assurance

  • Ensuring adequacy of Internal audit

  • Ensuring proper distinction between internal audit assurance and statutory/ external audit


ECIIA in open discussionwith EU associations

on EU regulatoryconsultations

European Commission

Business Europe


Three Lines of Defense

The IIA AdvocacyPlatform


The ECIIA working hard for the profession

  • Promoting good corporate governance and appropriate recognition of Internal Audit in the European regulatory enviornment

  • Marie_HélèneLaimay,

  • Vice President

  • Carolyn Dittmeier,

  • President

  • Martin Stevens,

  • Treasurer

  • Kristina Bernotaitė

  • Juan Ignacio Ruiz Zorrilla

  • Philip Ratcliffe

  • Hans Joachim

  • Büsselberg

Pascale Vandenbussche SecretaryGeneral

  • Thijs Smit


The Corporate Governance Citizen Program

Through Citizens comes Progress

Generali Assicurazioni


ThankyouEnjoy the Conference


ad
  • Login