Press release

6 March 2006

Corporate Governance: Clarification of the 'Comply or Explain' Principle

The European Corporate Governance Forum which examines best practices in member states in the field of corporate governance, has issued a public statement clarifying the ‘comply or explain’ principle, which obliges companies to justify any deviation from corporate governance codes. The Forum has also issued a report detailing its activities in 2005 and its plans for future activities.

The ‘comply or explain’ principle forms the basis of the European code-based approach to corporate governance. The Forum has undertaken to define in more detail the advantages and the limits of the ‘comply or explain’ principle from a European perspective. As a first step it has now adopted a common statement on the basic principles that guide the system of ‘comply or explain’.

In its annual report the Forum sets out the activities it undertook in 2005, including discussions on the following: recent developments in the member states in the field of corporate governance; the ‘comply-or-explain’ principle; the role and the rights of shareholders in the company; and rules on internal control and risk management mechanisms. On internal control the Forum concludes that for the moment there appears to be no need for further concrete steps. However, it will continue to review whether the current approach is sufficient for ensuring that internal controls within the EU meet best practice standards.

Related link: European Corporate Governance Forum

 

Related content

EventShaping a future-proof corporate ecosystem

12 October 2023

EventCorporate Sustainability Due Diligence Directive

5 July 2023

NewsAccountancy Europe calls for an ambitious EU due diligence framework

26 April 2023

PublicationDynamics influencing auditor choice in the Public interest entity market

17 March 2023

PublicationMulti-stakeholder analysis of corporate failures

8 February 2023

NewsJoint statement on the Corporate Sustainability Due Diligence Directive

8 December 2022

EventReducing corporate fraud risk: European perspectives

8 December 2022

PublicationAudit committees’ role in fighting fraud – Recommendations

30 November 2022

PublicationComparing European corporate governance models

17 November 2022

NewsEC’s proposal to ban products made using forced labour

28 October 2022

Consultation responseOECD’s consultation on the review of the G20/OECD principles of corporate governance

21 October 2022

EventMembers’ Engagement Day

19 October 2022

EventESG & Corporate Governance: the evolving role of audit committees

20 June 2022

PublicationStronger internal controls to reduce corporate risks

17 June 2022

Consultation responseEC’s corporate sustainability due diligence proposal

20 May 2022

PublicationESG Governance

12 April 2022

NewsEU Corporate Sustainability Due Diligence Directive: a global milestone that will need further clarity

24 February 2022

NewsExecutive directors’ bonuses must be linked with sustainability objectives

16 February 2022

NewsStronger corporate reporting in Europe – solutions by the accountancy profession

2 February 2022

Consultation responseEC’s consultation on corporate reporting – improving its quality and enforcement

2 February 2022

Sign up for our newsletter

* indicates required
Would you like to subscribe to our newsletter?
On which topics would you like to receive news?