Commission proposes more power to shareholders and directorship limits

A MAJOR shake-up of corporate governance proposes giving more power to shareholders and limiting the number of directorships a person can hold, initially in financial instructions but later in all public companies.

The proposals will come from the European Commission next week when it unveils a Green Paper on corporate governance in banks and other financialinstitutions together with a review on credit rating agencies regulation.

Internal Market Commissioner Michel Barnier has said the financial crisis revealed significant weaknesses in corporate governance and, while this did not cause the financial crisis, theeffects could have been mitigated by greater checks and balances.