Digital solutions to provide better information on companies and their structures: comments from a key stakeholder

Dr. Sigurt VitolsEuropean Trade Union Institute

Presentation for the European Commission Conference on “Company Law in the Digital Age”Brussels, 2 October 2015

Main points of presentation

● Current situation does NOT fulfill minimum information needs of workers and their representatives

● Number of employees, ownership, group structure, basic financial data a ‘black box’ in unlisted companies

● Cost + information overload arguments against transparency DO NOT apply to bulk of companies

● ‘Red rags’ for TUs – SUP, digital X-border company registration, X-border transfer of registered office● Letterbox companies● Undermining social standards● Tax evasion

● How can we identify ‘serious’ companies?

Information needs of European trade unions

● Policy evaluation – impact of legislation on e.g.● Societas Europaea/European Company (SE)● EU Cross Border Merger Directive

● Employee numbers key for trade unions● Often triggered by minimum employee numbers, e.g.

○ 5 employees for German works councils○ 25 employees in Sweden for board level worker representation

● ETUI’s SEEurope traces development of SEs since 2003● Network of correspondents from each EU/EEA country● Regular check of national registries + TED for SEs● Commissioned research by Lexidale on Cross Border

Mergers and worker participation● Current situation: “Looking for a needle in a haystack”

Some examples from ETUI research

● 70% of SEs are “UFOs” ● National registries lack basic information e.g. # of employees

on 1689 of 2423 SEs (Sept 2015)● 43% of SEs not listed in Tenders Electronic Daily (TED)

(Sept 2013)● TED also lacks basic information on SEs e.g. agreements on

worker participation● Lexidale study of CBMs involving worker participation

● Information not available for 33% of CBMs on:○ # of employees in ‘merged’ companies○ Relationship between merging companies (e.g. members of

same company group)● Agreements on worker representation arrangements,

employment impact of merger etc. often missing

A cost-effective digital solution for nonfinancial reporting?

● Main cost of ESG reporting: “glossy” publications?● ESG data collection small percentage of total costs● ESG reporting in Europe through XBRL (eXtensible

Business Reporting Language)???

Cost range of non-financial reporting for large companies (€ 000)

Source: Study for COM by CSES (2011: iv)

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