The European Parliament has today approved the revised directive on shareholders' rights. This will improve the long-term commitment of shareholders in listed companies and strengthen the link between directors' pay and long-term performance. The Greens/EFA group has pushed for inclusion of social and environmental performance criteria in assessment of directors' performance. Greens/EFA also strongly promoted the country-by-country (CBCR) annual reporting of companies. The Commission subsequently made a separate proposal in April 2016.
Greens/EFA member of the legal affairs committee Heidi Hautala said:
“By encouraging greater long term commitment from shareholders, we can help build an economy that is less short term in its outlook. We are pleased to have more transparency around executive pay, as well as giving shareholders a say on it. We have also delivered measures that will help to move beyond the limited view of a company's performance as purely financial. The social and environmental impact must now be taken into account in investment strategies, which will help better align the decisions of businesses with the needs of people and the planet.
"Having previously sought to introduce amendments calling for country by country reporting, we are pleased that the Commission introduced a legislative proposal on this, and urge swift action to make it a reality."