The committee accepted amendments by rapporteur Lambert Doorn (EPP, Netherlands) that a more flexible approach should be taken allowing member states to design rules in line with their own corporate governance structures.
The requirement, contained in the proposed statutory audit directive, was drafted as a response to corporate scandals such as Parmalat and aimed at enforcing corporate governance principles at EU level. It proposed to make it mandatory for every listed company to have an audit committee with specific powers and duties to supervise financial reporting procedures.
Over the past months there has been growing concern from industry groups that the directive would create rigidity and needless bureaucracy. The UK’s Institute of Directors warned that it would deter highly qualified people from serving on audit committees.