It is expected that corporate governance reforms that the EU passed in late 2005 will be fast-tracked and will likely become law in early March of 2006. The EU's corporate governance initiative, while initially spurred by Enron and other US scandals, were hastened by Italy's Parmalat scandal.
Under the reforms, off-balance-sheet financings must be disclosed. Other transparency reforms include the disclosure of related party transactions and the required inclusion of a "corporate governance statement" in companies' annual reports.
Not making it into the final draft were criminal sanctions, which remain subject to the national law of each member.
Many companies already disclose information of the type required under the new rules. These companies that already comply with international accounting standards will not be affected by the new rules.