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Terminology of governance and the context of CEIOPS’ proposals
1. We recommend that CEIOPS provide specific definitions of the terms ‘corporate governance’ and ‘internal governance’ (consistent with CEBS’ 2006 definition) and apply those definitions throughout the CEIOPS’ paper.
2. We recommend that, in para. 4.4, the CEIOPS’ paper acknowledge the range of committees that companies may find useful beyond those currently referred to (audit and remuneration committees).
3. We recommend that CEIOPS revise the list of responsibilities at para. 4.1 to reflect the distinctions between oversight responsibilities of the supervisory board or board of directors or equivalent, and the roles of management. We recommend further that para. 4.1 reflect the need for action by one or both of those parties to achieve the objectives listed at para. 4.1, and that the active requirement be reflected throughout the CEIOPS paper, where relevant.
4. In relation to internal control, we recommend that CEIOPS:
- acknowledge that COSO is only one of the available frameworks on internal control, preferably referring explicitly to other available approaches, such as those referred to in this comment paper;
- refer to the SEC criteria for acceptance of the validity of internal control frameworks either directly or by reference to principles for evaluation of control frameworks promulgated by the SEC under its Final Rule on internal control in 2003;
- acknowledge the need to ensure ongoing development and innovation in the development of frameworks for internal control.