COMPANY LAW : NON-FINANCIAL REPORTING AND GENDER BALANCE ON AGENDA.

 
FREE EXCERPT

In the area of company law, the Council will have to find a compromise, during the first half of this year, on the dossiers of non-financial reporting and of gender balance among non-executive directors of listed companies. Both files still create dissentions among member states. Th co-legislators will also have to advance on the proposal creating the statute for a European foundation. On mutual funds, the European Commission is set to adopt a new legislative proposal.

Reaching a deal on the issue of non-financial reporting should be feasible before the end of the European Parliament's term of office. According to a diplomatic source, the dossier "has not been handled very well" by the Lithuanian EU Presidency. Initially, the Commission submitted its proposal for a directive on the disclosure of non-financial and diversity information by certain large companies and groups - COM(2013)207 - in April 2013. But the European Council meddled in the process: following their May 2013 meeting, during which they focused on tax fraud, the heads of state and government issued conclusions calling for "rapid progress," notably examining the implementation of country-by-country reporting for large companies. This provision would oblige undertakings to publish a report for each member state and third country in which they operate, regarding profits made, taxes on profits paid and public subsidies received.

The members of the European Parliament's Committee on Legal Affairs (JURI) adopted a draft report on 17 December 2013, which includes a review clause asking the Commission to assess the impact of the implementation of this provision by 2018. The member states are reluctant to include country-by-country reporting in relation to non-financial reporting. Indeed, the latter requires a qualified majority in the Council, whereas taxation issues normally require unanimity. Another cause for division among member states is the quantity of information companies would be required to give, as well as the scope of the legislation.

Paradoxically, although these questions remain unanswered, the Lithuanian Presidency was granted a mandate to enter into negotiations with Parliament on 13 December, as the member...

To continue reading

REQUEST YOUR TRIAL