Introductory text

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Whereas:

Good and transparent corporate governance is essential for enhancing competitiveness and efficiency of businesses in the European Union as well as strengthening shareholders rights and third parties protection.

The Commission set up in September 2001 a high level group of company law experts to make recommendations on a modern regulatory framework for company law; the mandate of the high level group of company law experts was further extended to deal specifically with a number of corporate governance issues.

Following the presentation of the final report of the high level group of experts on company law on 4 November 2002, the Council invited the Commission to develop an Action Plan for company law and corporate governance; such an Action Plan should be in particular a considered response to recent corporate failures.

The Commission Action Plan on modernising company law and enhancing corporate governance in the European Union^f1, adopted in May 2003 identified a series of actions that are required in order to modernise and simplify the regulatory framework, including the creation of the European Corporate Governance Forum.

On 22 September 2003 the Council welcomed the presentation of the Action Plan which it considered to be an important element of establishing a transparent and sound capital market in an enlarged Union; the Council endorsed the Commission’s recognition of the importance of expert and public consultation as an integral part of the development of company law and corporate governance at European level and took note of the Commission’s intention to set up a Forum on systems of corporate governance within the European Union.

The European Corporate Governance Forum should serve as a body for exchange of information and best practices existing in Member States in order to enhance the convergence of national codes of corporate governance as well as a body for reflection, debate and advice to the Commission in the field of corporate governance.

The European Corporate Governance Forum should draw up its own rules of procedure and fully respect the role and the prerogatives of the institutions^f2,

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