EU Regulatory Measures Following the Crises: What Impact on Corporate Governance of Financial Institutions?

Izabela Jędrzejowska-Schiffauer , Peter Schiffauer , Eleftherios Thalassinos
European Research Studies Journal, Volume XXII, Issue 3, 432-456, 2019
EOI: 10.11214/thalassinos.22.03.030

Abstract:

Purpose: This study investigates the relevance of certain EU regulatory measures introduced in response to the financial and sovereign debt crises for corporate governance and their possible impact on the modalities of company operation, notably in terms of risk assessment and management. Design/Methodology/Approach: The contribution is based on a review of literature and an analysis of EU legislative and soft law measures agreed in 2008 onwards pertinent to corporate governance, notably of financial institutions due to their systemic relevance. The applied research methodology includes a combination of theoretical and analytical methods. Findings: It is submitted that there is an observable trend of extending the power of shareholders and of regulation in the public interest at the cost of the management power. Moreover, certain aspects of corporate governance seem to steadily evolve from code-based 'soft law' norms to mandatory rules. Practical Implications: EU regulatory-corrective measures constitute ‘grosso-modo’ a desirable progress towards a more transnational approach. However, there can be no single blueprint for reforms given the differences between national systems of corporate governance, including their scope, contents, and means of implementation. Hence, the potentials of an incentive-oriented approach should be better exploited in both national and EU level regulatory activities. Originality/Value: The study offers an updated account of the most recent EU legislative activity in the area up to the end of the 8th term of the European Parliament. It may be used for corporate governance practitioners allowing for informed adapting to the new regulatory framework and trends in the foreseeable future.


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