Can the EU directives, deliver Governance, Risk and Compliance reforms to achieve significant bottom-line improvements? The EU directives commonly referred to as EuroSox® comes in to force from 2008/9. Implementing the directives, can be a strategic opportunity to control the regulatory parameters of the company. The accounting directive focuses on four key revisions to enhance confidence in financial reporting by companies: - Board members are collectively responsible for financial statements and key non-financial information
- Making transactions with related parties more transparent
- Provide full information on off-balance-sheet arrangements, including qualified special-purpose vehicles (QSPE)
- Issue an annual corporate governance statement
The links to the principal EuroSox® directives are as follows: General Link to Accounting Directives 4th directive 78/660/EEC - Annual Accounts of specific type of companies 7th directive 83/349/EEC - Consolidated accounts 8th directive 84/253/EEC - Auditor and audit committee requirements
A synopsis of the responsibilities and requirements of the 3 directives are: - Assure effective corporate governance, internal controls and risk management
- Measures that safeguard shareholders' investments
- Increased Financial disclosure requirements
- Establish audit committees
- Improved corporate governance standards and codex.
Conclusion: Even the smallest Governance, Risk and Compliance enhancements, collectively taken, can achieve significant bottom-line improvements. Board members have also realised the importance to safeguard the trust of the international investor. The Investors on the other hand, are willing to pay a premium for effective risk management in the companies they would invest in. Other documents in this series: EuroSox Introduction, Organising a EuroSox Project, Organising EuroSox IT to-do list, Audit Standards for EuroSox, and How to Organize an Internal Controls Project. | 
