Governance watch: European Commission's recommendations get mixed reviews.

Pensions Week, November, 2004

The European Commission, as part of its corporate governance action plan launched last year, has recently issued two new recommendations concerning the role of non-executive directors and an appropriate regime for the remuneration of directors. As recommendations, they are non-binding and are addressed to the member states for application to listed companies, with a view to reviewing the effect of measures taken by member states between now and July 2006.

Following the consultations on the specific measures to be proposed, which took place in the spring of this year, reaction has been predictably divided, particularly concerning remuneration.

Broadly speaking, it can be said for both recommendations that the bar has been set much nearer to the highest...

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