Press release

6 March 2006

Corporate Governance: Clarification of the 'Comply or Explain' Principle

The European Corporate Governance Forum which examines best practices in member states in the field of corporate governance, has issued a public statement clarifying the ‘comply or explain’ principle, which obliges companies to justify any deviation from corporate governance codes. The Forum has also issued a report detailing its activities in 2005 and its plans for future activities.

The ‘comply or explain’ principle forms the basis of the European code-based approach to corporate governance. The Forum has undertaken to define in more detail the advantages and the limits of the ‘comply or explain’ principle from a European perspective. As a first step it has now adopted a common statement on the basic principles that guide the system of ‘comply or explain’.

In its annual report the Forum sets out the activities it undertook in 2005, including discussions on the following: recent developments in the member states in the field of corporate governance; the ‘comply-or-explain’ principle; the role and the rights of shareholders in the company; and rules on internal control and risk management mechanisms. On internal control the Forum concludes that for the moment there appears to be no need for further concrete steps. However, it will continue to review whether the current approach is sufficient for ensuring that internal controls within the EU meet best practice standards.

Related link: European Corporate Governance Forum


Related content

NewsA 360 view on Sustainable Corporate Governance

14 July 2021

Consultation responseUK government BEIS department’s consultation on restoring trust in audit and corporate governance

8 July 2021

EventSustainable Corporate Governance – A fireside chat with MEP Heidi Hautala

21 June 2021

PodcastThe shift to sustainability: A CFO’s journey

20 May 2021

PublicationResponses to Fraud and Going concern: recommendations to strengthen the financial reporting ecosystem

17 May 2021

NewsAccountancy Europe: Toughen the financial reporting ecosystem against fraud

23 April 2021

NewsIn-depth: what is at stake in EU plans for sustainable corporate governance?

9 April 2021

NewsFraud and going concern: Restoring public trust in the financial reporting ecosystem

24 March 2021

Consultation responseEC’s Consultation document proposal for an initiative on sustainable corporate governance

8 February 2021

EventSustainable corporate governance: future role for audit committees

5 February 2021

PublicationGoing concern: recommendations to strengthen the financial reporting ecosystem

3 February 2021

PublicationFraud: recommendations to strengthen the financial reporting ecosystem

3 February 2021

PublicationSME risk management: insolvency

1 February 2021

Podcast Time to build back better corporate governance

22 January 2021

PodcastCorporate governance for a sustainable economy

27 November 2020

EventMembers’ Webinar Series

21 October 2020

NewsAccountancy Europe welcomes EU sustainable corporate governance initiative

8 October 2020

Consultation responseEC roadmap on sustainable corporate governance

8 October 2020

BlogWhat COVID-19 made clear: corporate governance needs to focus on the right risks

8 September 2020

Blog4 steps to a sustainable recovery from COVID-19

6 August 2020

Sign up for our newsletter

* indicates required
Would you like to subscribe to our newsletter?
On which topics would you like to receive news?