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Investor Protection in EuropeCorporate Law Making, The MiFID and Beyond$
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Guido Ferrarini and Eddy Wymeersch

Print publication date: 2006

Print ISBN-13: 9780199202911

Published to Oxford Scholarship Online: January 2009

DOI: 10.1093/acprof:oso/9780199202911.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 29 November 2021

Nonfinancial Disclosure between ‘Shareholder Value’ and ‘Socially Responsible Investing’

Nonfinancial Disclosure between ‘Shareholder Value’ and ‘Socially Responsible Investing’

(p.365) 13 Nonfinancial Disclosure between ‘Shareholder Value’ and ‘Socially Responsible Investing’
Investor Protection in Europe

Francesco Denozza

Oxford University Press

Under European law, issuers of financial instruments must disclose as soon as possible information which would be likely to have a significant effect on the prices of those financial instruments. When a sufficient number of investors decide whether or not to carry out stock investments in a specific company after having taken into account nonfinancial information, information of this kind can have a significant effect on the prices. It follows that the disclosure of socially relevant data may be mandatory even when those data are financially immaterial and their disclosure may harm the company and its actual shareholders. Thus, we become aware of the existence of a conflict between investors interested in nonfinancial information and other investors. The European law's choice of imposing the disclosure of nonfinancial information, even when it could harm the company and its shareholders, puts the interest of investors concerned only with the maximization of the value of their shares after the interests of other investors.

Keywords:   Transparency Directive, financial information, nonfinancial information, disclosure, Market Abuse Directive, inside information, shareholders value model

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