The EU Approach to Corporate Governance

The European Union (EU) has achieved a great deal in terms of addressing disclosure, shareholder protection, and board structures and responsibilities since the adoption of its Action Plan for Modernizing European Company Law and Enhancing Corporate Governance in the EU (2003). Yet, candidate and potential candidate countries are not always conversant with EU corporate governance requirements and recommendations.

To facilitate access to current European best practices, this paper provides a brief review of the EU approach to corporate governance including recent developments. Its objective is to build understanding and awareness of the EU corporate governance directives, regulations, best practices, and guidelines and to help candidate and potential candidate countries better access relevant EU information. Beyond EU accession, it is important for countries of the Southeast European region to better comply with EU corporate governance standards to improve trade with EU partners, attract EU investors, and compete with EU companies.