European Union (EU) internal market commissioner Charlie McCreevy has
indicated a willingness to compromise with opponents of a proposed EU directive
that would force listed companies to appoint in-house audit committees.
Speaking to a conference on European corporate governance, in Luxembourg
City, McCreevy recognised the critics, whom he said had ‘woken up somewhat late
in the day’.
He said: ‘If the directive confirms the now well-established principle of an
audit committee as a tried and tested way of ring-fencing the audit function,
then I am prepared to live with some flexibility.’
His comments came after the European Parliament’s legal affairs committee
approved amendments to the eighth company law directive that would abolish the
requirement to appoint a committee, as imposing ‘uneccessary administrative red
tape and extra costs’.
This change would need support from the full parliament to be taken forward,
but McCreevy signalled he is prepared to strike a deal, declaring: ‘I am a
However, he added: ‘but we should be clear about what we are doing and avoid
introducing woolly new concepts, which may do little more than fudge the issue.’
Stressing that the proposal had been tabled last October, the Irish
commissioner claimed there was ‘nothing revolutionary about the proposal’,
adding: ‘most companies in Europe, who take corporate governance seriously,
already have audit committees.’
McCreevy also categorically ruled out EU legislation on the remuneration of
directors and non-executive directors, following the Commission’s publication of
optional guidelines. ‘They are not the thin-end of the wedge,’ he said.
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