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July 2011


LSEG Response to the European Commission's Green Paper on the corporate governance framework in the EU The LSEG has provided a full response to the European Commission's Green Paper on the corporate governance regime in the European Union. In summary:
    • Strong corporate governance is good for companies and investors, and the "comply or explain" regime is the right model for delivering an appropriate balance between regulation and flexibility.
    • We recognise that explanations in some incidences need to be improved.
    • The diversity of short-term and long-term investors with different strategies and motivations drives liquidity in markets, and economic growth.
    • The turnover of beneficial ownership data, instead of share turnover data, to accurately assess how long investors hold shares for is more reflective of behaviour.
    • Applying different corporate governance regimes based on quantitative thresholds would cause considerable confusion – “comply or explain” provides adequate flexibility for smaller listed companies to apply corporate governance in a relevant way.
    • The principles of good corporate governance can be a useful guide for unlisted companies – but requirements should account for the growth profile of the organisation, its ownership structure, and the environment in which it operates.
    • Member states should be free to determine the best approach to applying corporate governance standards.

LSEG Response to EC Green Paper on corporate governance(pdffile pdf - 73 KB)

   

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