Cristina UngureanuFrom: Governance of Financial Institutions
Edited By: Danny Busch, Guido Ferrarini, Gerard van Solinge
This chapter examines the engagement of investors in the governance of financial institutions. In its 2012 Action Plan on company law and corporate governance, the European Commission announced several actions in the area of corporate governance, particularly to encourage long-term shareholder engagement and to enhance transparency between companies and investors. Consequently, the role of shareholders has been amplified through enabling the ‘say on pay’ system on various countries, which has been introduced as a governance mechanism allowing shareholders of companies across industries to have a voice on the suitability of companies' executive compensation. All these initiatives have directed investors to step up and exercise their own ownership rights in an active and conscious manner in all issuer companies, irrespective of industry and sector. More recently, there has been consensus that good governance practices and related disclosure should benefit not only shareholders, but also other stakeholders such as creditors and employees.