EUROPE - The European Commission has launched a green paper canvassing the industry for the best means of improving corporate governance.

The consultation covers a wide range of issues, including how to improve diversity on boards and the monitoring and enforcement of existing national corporate governance codes. It also looks into how to "enhance" shareholder engagement.

One of the lessons of the financial crisis, according to the Commission, is that corporate governance - "until now usually based on self-regulation" - was "not as effective as it could have been".

Michel Barnier, Internal Market and Services commissioner, said: "In the current economic situation, we need more than ever to ensure that companies are well governed and consequently reliable and sustainable.

"Too much short-term thinking has had disastrous consequences. That is why we have launched a debate on the effectiveness of the existing corporate governance framework.

"Above all, we need company boards to be more effective and shareholders to fully assume their responsibilities."

The deadline for responses is 22 July. The Commission will then examine the responses and issue a feedback statement later this autumn.

It said it would then decide whether legislative proposals would be necessary, but only after conducting a "thorough impact assessment".