02 Dec 2022

New Oxera report predicts benefits of an enhanced corporate governance framework for corporate reporting in the EU

The recent consultation by the European Commission’s DG FISMA on the quality of corporate reporting covers three pillars: (i) corporate governance; (ii) statutory audit; and (iii) the supervision of statutory auditors and audit firms. The European Contact Group (ECG) supports the system-wide approach adopted by the European Commission. The roles and responsibilities of management and audit committees, statutory auditors and public supervisors should be aligned and evolve in a consistent manner.

As a contribution to the European Commission’s policymaking, the ECG asked Oxera - one of Europe's largest specialised economics research and advisory firms - independently to look at the question what the EU might expect from an enhanced corporate governance framework for corporate reporting.

Oxera’s final report “An analysis of the EU governance framework for corporate reporting” seeks to identify the benefits of enhancing and harmonizing management and boards responsibilities for corporate reporting across the EU. It describes the respective frameworks for each of the 27 Member States, identifying a patchwork of obligations with huge variations in terms of requirements and rigor.

Using real market data and information about enhanced frameworks in Italy, Japan, South Africa and the USA the report then models the long-term impact of enhancing management and boards’ responsibility for internal controls over corporate reporting.

The report concludes that if similar responsibilities were introduced at the EU level, EU companies could expect to see significant benefits, for example by a reduction in the Cost of Equity of between 0.5-1.5 percentage points (with a point estimate of 1 percentage point). Such a reduction would make the EU more attractive to investors and increase the ability of European business to innovate. It could also have benefits for consumers.  For example, if the average Cost of Equity was reduced today by 0.5-1.5 percentage points, consumers should expect to receive lower energy bills because pricing is pegged to the Cost of Equity in regulated markets like this.

ECG Chairman Maurizio Donvito said:

“The Oxera report demonstrates that introducing a reasonable and consistent framework for the responsibilities of management and boards for high quality corporate reporting at an EU level would not only enhance the quality of such reporting but would have significant benefits for Europe and its citizens over the medium to long term. A win-win for European capital markets, companies, their directors; indeed all players in the corporate reporting ecosystem”

Read the Oxera report here

The ECG organised a roundtable to bring together participants from industry, civil society, academia, and EU institutions to discuss and challenge the findings of the Oxera report and explore what policy conclusions could be drawn from the research for future action by the EU.

Read a summary of the roundtable here

Listen to the podcast (part 1) recorded during the event here

Listen to the podcast (part 2) recorded during the event here


The members of the ECG are networks of independent and locally owned firms providing accountancy, auditing and consulting services. Firms in the ECG networks collectively employ 290.000 people in EU Member States and are present with 1.300 office locations in over 340 European cities.