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Corporate Governance Guidance for Unlisted Companies in Europe

This document is a practical tool for unlisted companies and their stakeholders developed by the European Confederation of Directors’ Associations (ecoDa), “the European voice of board directors”. It was produced by a working group set up by ecoDa and chaired by Prof. Dr. Lutgart Van den Berghe, Chairwoman of ecoDa’s Policy Committee and Executive Director of GUBERNA.

Unlisted companies account for more than 75% of European GDP. They are key providers of current and future employment as well as the source of a large proportion of European economic growth. It is hoped that this pioneering and practical initiative will have a significant impact on economic development in Europe.

In the context of the economic crisis, unlisted companies have to look for new drivers of change. EcoDa is convinced that Corporate Governance can act as an efficient tool in promoting the growth and sustainability of European companies. The financial crisis has highlighted the importance of applying good practices. However governance is not only relevant for financial institutions and listed companies; Corporate Governance is essential in underpinning entrepreneurship in all kinds of enterprise.

In this document, fourteen principles of good governance are presented on the basis of a dynamic phased approach, which takes into account the degree of openness, size, complexity and level of maturity of individual enterprises. Unlisted companies – such as founder and family-owned businesses - can extract from this stepwise approach useful guidelines to promote their sustainability, to bring external parties to their boards, to attract funds, and to solve issues between shareholders.