New Beginning or False Dawn? The Evolution and Nature of the European Company Statute
Abstract:The European Company Statute, which was eventually adopted by the European Union (EU) in 2001, is one of a series of measures proposed by the Commission in an attempt to harmonise company legislation across the EU Member States. Since 1968, when the first company law harmonisation directive was adopted (on disclosure requirements), the process has covered a wide variety of areas including domestic and cross-border mergers, group accounting procedures, the qualifications of statutory auditors and the rights of minority shareholders, amongst others. By 2001, some twelve such directives had come into force, together providing a firm basis for the integration of the legislation governing European corporate practice.
These legal initiatives have been underpinned by the emergence of the Eurocompany, the product of ‘pan-European approaches to industrial relations and employment matters’ (Marginson, 2000: 21). Managements in multinational companies have responded to the deepening processes of European economic, political and social integration by organising production, sales, marketing, human resources and other functions on a European scale. These processes have been accompanied by common policies on equal opportunities, training and remuneration, as well as by a whole range of performance control systems involving benchmarking and productivity indicators (Marginson and Sisson, 2006: chap. 8). The development of European works councils has been only the most visible aspect in the evolution of the Eurocompany (Gold, 2003).
However, until now, the Eurocompany – as a term used by researchers, rather than by employers – has remained a theoretical construct, a phenomenon created by employer responses to regional integration and by piecemeal Commission measures on company law harmonisation. Indeed, many commentators insist on the enduring influence of national institutions and legal frameworks on forms of corporate governance and industrial relations, and refer to ‘varieties of capitalism’ (Amable, 2003; Whitley, 1999). They point out that many features of the domestic business environment – such as forms of owner control, sectoral integration, collaboration between competitors and trust shown towards workers – remain very resilient to processes of convergence resulting from European integration. The question, then, is the extent to which multinational companies manage to transcend these national frameworks to occupy a genuinely European ‘space’. The European Company Statute (ECS) has now, arguably, created the legal foundation for such a space because it is intended to simplify the range of different regulations otherwise applicable to companies in each Member State, reduce administration and legal costs, and promote economies of scale. Furthermore, European companies should be able to restructure themselves more easily across borders as they can relocate their registered offices without being restricted by national bureaucracies.
Document Type: Research Article
Publication date: January 1, 2009