Commission gives up on ‘one share, one vote’ reform

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Internal Market Commissioner Charlie McCreevy has announced that he will be abandoning controversial plans aimed at making companies more accountable and efficient by awarding all shareholders equal voting rights.

In a speech to Parliament’s Legal Affairs Committee on 3 October, McCreevy said that he would let go of plans, put forward two years ago, to make shareholder voting more “democratic” with a “one share, one vote” reform. 

The move had been fiercely opposed by countries such as France, Sweden and Spain, where greater weight is often given to company owners, government shares or long-time shareholders. 

McCreevy had argued that such voting systems interfere with the efficient management of businesses and make it harder for companies to attract fresh capital. But, after a Commission study published in May 2007 revealed that there is no link between voting systems and company profits, McCreevy was forced to conclude that the EU should stay out of this debate. 

“The study found that there is no economic evidence of a causal link between deviations from the so-called ‘proportionality principle’ and the economic performance of companies… My conclusion is that there is no need for action at EU level on this issue,” he said. 

The European employers’ lobby group BusinessEurope welcomed the news: “We have consistently said there is no one-size-fits-all in this area. It is up to each company to determine its structure,” Legal Affairs Director Jérome Chauvin told the Financial Times. 

The Commissioner, on the other hand, announced that he would be presenting a proposal, before mid-2008, for the creation of a much-awaited European Private Company (EPC) statute, intended to help Europe’s small-and medium-sized enterprises to do business across borders. 

“Having listened to the arguments, I can see that a European Private Company could reduce compliance costs. It might well enhance the mobility and competitiveness of European SMEs. I have therefore instructed my services to give high priority to work on this issue,” he said. 

SMEs, which now represent more than 90% of EU GDP and two thirds of jobs, have been stressing the need for the Commission to provide them with a more efficient vehicle to operate across the EU, because they are currently forced to comply with a complex web of up to 27 different national company statutes if they wish to operate throughout the whole internal market (EURACTIV 15/05/07). 

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