MEP for Dublin, Nessa Childers, today called on her colleagues to support the shareholders’ rights directive review, which will be put to a vote tomorrow in the European Parliament after work on the proposal was led by her political group, the Socialists and Democrats.
The proposal, which many conservative members of Parliament are reluctant to support, introduces important reforms to corporate governance for large and publicly listed companies. This includes country-by-country reporting requirements on taxes paid and measures to discourage short-termist behaviour that ultimately undermines companies’ performance and prospects.
Speaking from Strasbourg, where the proposal was debated in the European Parliament today, Ms. Childers said:
“The conservative right is constantly making much of their support to entrepreneurs and the private sector, yet many seem very reluctant to help bring these improvements about just because we are pushing for improved tax transparency.
“The string of ‘Swissleaks’ and ‘Luxleaks’ disclosures made it imperative that we improved transparency provisions on tax rulings issued for listed companies and a country-by-country breakdown.
“This will allow us to see where taxes are effectively paid, and how that relates to the actual location of their economic activities.
“Raids by certain investors and asset managers for speculative or short-term gains have also blighted or killed off bright prospects for companies with serious but long term strategies.
Asset-stripping, the harassment of managers for quarterly returns and very high turnovers in company shares are symptoms of financial frenzy that do no good to the real economy and those who work to make it function properly.
“This is why we need to tie directors pay more closely to longer-term performance, and give not only shareholders but also company employees more say on how much they get, and more information on who the shareholders are and what strategies institutional investors are pursuing.
“We want to foster longer-term shareholders by requiring countries to introduce measures such as additional voting rights, tax advantages or loyalty dividends or shares to reward these as opposed to speculators or parasitical corporate raiders.
“I hope that at least some within Fine Gael’s group, together with the liberals and the Tories, have been persuaded of the merits of these measures since they opposed our proposal at committee stage, so that we can clear the way for this proposal today and present it to the Member States.”