McCreevy rejects EU corporate governance code

Former finance minister and now internal market commissioner Mr Charlie McCreevy yesterday dismissed the idea of an EU-wide corporate governance code, arguing that such codes should be left either to industry or national regulators.

Mr McCreevy said: "The Commission does not want to enact a European code of corporate governance. We see no need for this at present and the adoption of such a code, if it were even possible, would be an inevitable and possibly messy political compromise, which would be unlikely to achieve full information for investors."

However, Mr McCreevy made clear that having different codes in the EU "may entail some frictional and fragmentary cost".

The Commission would therefore encourage moves towards greater convergence.

His remarks reiterated statements by the Commission, but they will allay fears among European companies that Brussels is trying to force out established national governance codes.

Such concerns have emerged after Brussels issued a barrage of new rules and regulations in the wake of the financial scandals at Enron and Parmalat.

Over the past year, the Commission has made proposals on off-balance-sheet financing arrangements, auditor rotation and mandatory annual corporate governance statements, among other issues.

Brussels has also issued non-binding recommendations on how to strengthen the independence of non-executive directors and improve the transparency of boardroom pay.

The latest concerns were expressed only yesterday, when four of Germany's biggest business and employers' groups attacked aspects of the Commission's plans for a mandatory corporate governance statement. "EU law should limit itself to principles," they said.