A proposal to revise the existingShareholder Rights Directive (2007/36/EC)has been agreed at EU level. The 2007 Directive sought to improve corporategovernance in companies traded on an EU regulated market by ensuring thatshareholders could exercise their voting rights and rights to informationacross borders.
The revisions to theDirective were proposed to tackleperceived corporate governance shortcomings in listed companies in the EU andto further encourage transparency and shareholder activism.
Key aspects of therevised Directive include:
- The introduction of a “say on pay” and the requirement to publicly disclose the remuneration policy of the directors
- Measures to assist companies in identifying their shareholders
- New obligations on intermediaries (i.e. firms that provide services of safekeeping of shares, administration of shares or maintenance of securities accounts) to facilitate the exercise of rights by shareholders
- Transparency requirements for institutional investors, asset managers and proxy advisors
- A requirement for material related party transactions to be approved by the shareholders and be announced publicly
The new Directivewill shortly be formally adopted by the European Parliament and Council. Itwill then be published in the Official Journal of the European Union, afterwhich Member States will have two years to transpose the provisions intodomestic law.
Contributed by AoifeKavanagh
