1. IS THE CURRENT BALANCE OF REGULATION/SOFT CODE RELATING TO BOARD ACTIVITY IN EUROPE APPROPRIATE? 1 European Union Corporate Governance Standards Working Group Meeting, December 17, 2013 Leda Condoyanni, General Manager Hellenic Corporate Governance Council a.s.b.l. Confédération Européenne des Associations d’Administrateurs European Confederation of Directors’ Associations

2. Transposition of DIR 2006/46 2 The corporate governance “statement shall be included as a specific section of the annual report and shall contain at least the following information: (a) a reference to: (i) the corporate governance code to which the company is subject, and/or (ii) the corporate governance code which the company may have voluntarily decided to apply, and/or (iii) all relevant information about the corporate governance practices applied beyond the requirements under national law. Where points (i) and (ii) apply, the company shall also indicate where the relevant texts are publicly available; were point (iii) applies, the company shall make its corporate governance practices publicly available.”

3. Transposition of DIR 2006/46 3  However, erroneous practices might prevail: Some companies consider a subset of the provision of the Code as a complete code in their own right.  Need to: Clarify what is meant under (i), (ii), (iii) above Review directive transposition into national legislation

4. Certain considerations that may affect board structure: Ownership structures: dispersed, family controlled, state or, one or more, other block-holders New ownership structures in distressed economies / countries (bank recapitalization, sale of state holdings) Existing CG systems did not protect shareholders Related party transactions still an issue in some countries 4

5. Certain considerations that may affect board structure: Who sets the balance between regulation and soft law? – regulators – stock exchanges – market (local institutional investors?) – WB Doing Business Report –Protecting Investors Index Role of national CG bodies 5

6. Certain considerations that may affect board structure: Role of non-executive members (≠ independent non-executive) Board decisions that should not be delegated Board supervision Trustees in banks, state representatives Should board seats be reserved to minor shareholders? 6

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