16.8.2006 Official Journal of the European Union L 224/1 (Acts whose publication is obligatory) DIRECTIVE 2006/46/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 14 June 2006 amending Council Directives 78/660/EEC on the annual accounts of certain types of companies, 83/349/EEC on consolidated accounts, 86/635/EEC on the annual accounts and consolidated accounts of banks and other financial institutions and 91/674/EEC on the annual accounts and consolidated accounts of insurance undertakings (Text with EEA relevance) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EURO- PEAN UNION, Having regard to the Treaty establishing the European Commu- nity, and in particular Article 44(1) thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Economic and Social Committee (1), Acting in accordance with the procedure laid down in Article 251 of the Treaty (?), Whereas: ey On 21 May 2003, the Commission adopted an Action Plan announcing measures to modernise company law and enhance corporate governance in the Community. As a short-term priority, the Community was to confirm the collective responsibility of board members, increase trans- parency in transactions with related parties and off- balance-sheet arrangements and improve disclosure about corporate governance practices applied in a company. Pursuant to that Action Plan, members of the administra- tive, management and supervisory bodies of a company were, as a minimum requirement, to be collectively responsible towards the company for drawing up and publishing annual accounts and annual reports. The same approach was also to apply to members of the adminis- trative, management and supervisory bodies of undertak- ings drawing up consolidated accounts. Those bodies act (1) OJ C 294, 25.11.2005, p. 4. (?) Opinion of the European Parliament of 15 December 2005 (not yet published in the Official Journal) and Council Decision of 22 May 2006. within the competences assigned to them by national law. This should not prevent Member States from going fur- ther and providing for direct responsibility towards share- holders or even other stakeholders. On the other hand, Member States were to refrain from opting for a system of responsibility limited to individual board members. However, this should not preclude the ability of courts or other enforcement bodies in the Member States to impose penalties on an individual board member. Liability for drawing up and publishing annual accounts and consolidated accounts as well as annual reports and consolidated annual reports is based on national law. Appropriate liability rules, as laid down by each Member State under its national law or regulations, should be applicable to members of the administrative, management and supervisory bodies. Member States should remain free to determine the extent of the liability. In order to promote credible financial reporting processes across the European Union, members of the company body that is responsible for the preparation of the com- pany’s financial reports should have the duty to ensure that the financial information included in a company’s annual accounts and annual reports gives a true and fair view. On 27 September 2004 the Commission adopted a Communication on preventing and combating financial and corporate malpractice outlining ‘nter alia’ the Com- mission policy initiatives regarding internal control in companies and responsibility of board members.