The Swedish Corporate Governance Board has launched a scathing attack on the European Commission’s corporate governance proposals.
It has called them unwarranted, unnecessarily prescriptive and counterproductive. The Board also suggests that a “common Nordic approach” should be considered.
The comments come ahead of the Commission’s green paper on corporate governance at listed companies, which is due in April and is expected to feature a far stronger mandatory element.
“The type of regulation being discussed would to a great extent, however, be perceived from the Swedish perspective as unwarranted and unnecessarily prescriptive,” it says. It fears that any new rules would be “poorly suited to Swedish circumstances” – and atodds with the successful Nordic model.
It deplores the “unsubstantiated” notion that poor corporate governance played a significant role in the financial crisis.
“What we see now, not least in the ongoing debate within the EU, is that this notion is being applied without much opposition to listed companies in general, and there is even less evidence to support this.”
It fears the “illusion of strong action” and warns against “an impenetrable flora of mutually incompatible laws”.
The proposals could lead to the erosion of owners’ responsibility for listed companies, “with potentially damaging consequences for the workings of the market economy”. The comments expand on remarks reported by Responsible-Investor last month.