Enterprises : Eu Seeks to Foster Responsible Approach to Business
Encouraging the creation of social businesses, promoting the concept of corporate social responsibility, cutting red tape for small companies in Europe and improving the transparency of listed companies: these are the ambitious objectives of the new responsible businesses' package, adopted by the European Commission on 25 October. It consists of proposals for the amendment of two directives, one on accounting standards and the other on transparency, and three communications, on the general presentation of the package, the second on corporate social responsibility and the third on social entrepreneurship.
For Commission Vice-President Antonio Tajani, in charge of enterprises and industry, "this package of measures is in the interest of both enterprises and European society as a whole. It reduces administrative burdens on small and medium-sized enterprises and establishes conditions for a strong, dynamic social market economy in the medium and long term."
The two legislative initiatives in the package aim to build confidence in way European companies operate. For the fourth and seventh accounting directives, this means simplifying and modernising Directives 78/660 on annual accounts and 83/349 on consolidated accounts to ease the burden on SMEs, bringing potential savings of 1.7 billion per year, according to the Commission. There will have to be an identical definition throughout the EU of small, medium-sized and large enterprises and the accounting information to be provided by small entities will be limited to the five key aspects listed in the annex. This will help improve the clarity and comparability of accounts, so that all European enterprises, whatever their size, will have easier access to financing and export opportunities.
The proposal for amendment of the transparency directive is meant to strengthen the transparency of companies' social and environmental activities and to cut red tape for listed SMEs. This review focuses on three areas. First, the Commission wants to exempt SMEs from the obligation to publish quarterly financial statements so as to reduce their costs and combat investors' short-term approach, while improving SMEs' access to credit. Second, the idea is to improve transparency with respect to shareholding in listed companies by imposing the notification of sophisticated financial instruments, used potentially to mask the ownership of voting rights. …