Listed Company Day: How can corporate governance remove legal and market barriers?
A Market in Transition
The European capital markets are facing a paradox. While market capitalization has increased by 42% since 2016, the number of listed companies has dropped by nearly 30%. This decline accelerated after 2021, signalling a structural weakness in Europe’s ability to attract and retain stock market listings. At the Annual Listed Company Day in Brussels, jointly organized by GUBERNA and VBO/FEB, experts agreed that European households are saving but not investing, a trend that undermines innovation and long-term growth. Two expert panels discussed the legal and market barriers that may impact this market development. The challenge is clear: how can Europe make its markets more attractive and competitive in a global environment?
Regulation: Burden or Opportunity?
Regulation was at the heart of the debate. Panellists acknowledged that overregulation imposes administrative and disclosure costs such as additional staff, complex reporting systems, and mounting compliance obligations. Yet, they also recognized its potential to build resilience and trust over time; the consensus was that simplification, not deregulation, is the way forward. Companies need proportional rules and a risk-based approach to compliance, while policymakers must avoid layering new obligations without assessing existing ones. Boards were urged to anticipate regulatory changes and transform compliance into strategic advantage, turning obligations like CSRD and NIS2, for example, into levers for innovation rather than mere box-ticking exercises.
Sustainability: From Burden to Differentiator
Sustainability reporting emerged as both a challenge and an opportunity. While the EU’s ambitious frameworks (CSRD, CS3D, and the Taxonomy) aim to drive the green transition, their complexity risks overwhelming companies, especially SMEs. Reporting fatigue is real, and the cost of compliance is high. However, sustainability itself remains a powerful competitive differentiator. Companies that embed ESG into their core strategy are in a better position to attract investors, mitigate risks, and unlock new growth opportunities. The key lies in shifting from compliance-driven reporting to strategic positioning, supported by governance systems that prioritize long-term value creation.
Restoring Market Attractiveness
Liquidity and visibility are critical pain points for Belgian and European SMEs. Fragmented trading platforms, fiscal constraints, and limited analyst coverage make it harder for smaller companies to access capital. At the same time, geopolitical uncertainty and macroeconomic volatility add layers of complexity to investment decisions. To reverse the trend of declining listings, Europe must complete the Capital Markets Union and accelerate the Savings & Investment Union. This means channelling household savings into equity markets, harmonizing supervision, and reducing administrative burdens by at least 25% or even 50% for SMEs, as suggested by the Draghi Report. Both panels agreed that it is the board’s role to engage with policymakers on reforms that both remove counterproductive regulatory burdens and stimulate innovation. Without bold reforms, Europe risks losing its competitive edge and seeing more companies migrate to markets abroad.
Conclusion
The Annual Listed Company Day underscored a shared ambition: to make European capital markets a driver of innovation and sustainable growth. Achieving this will require a new mindset, one that balances investor protection with competitiveness, simplifies regulation without compromising integrity, and turns sustainability into a strategic advantage for long-term value creation. For boards, regulators, and market operators the time for incremental change is over, Europe needs decisive action to restore confidence, attract investment, and secure its place in the global financial landscape.
