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Directive on the exercise of shareholders' voting rights (Directive 2007/36/EC)

In 2007 a directive on shareholder rights (2007/36/EC) was adopted. The main function of the directive is to define minimum rights for shareholders in listed companies across the EU. This directive is one measure in the follow-up to the Commission Action Plan on modernising company law and enhancing corporate governance in the European Union.

The full title of the legislation is Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies. This was supposed to be transposed into national law by 2009. It includes a number of specific requirements, including timely access of shareholders to all information relevant to general meetings. Furthermore, there are provisions to facilitate the cross-border exercise of voting rights by correspondence and by proxy. Furthermore, the directive abolishes share blocking and related practices, since these constitute a major obstacle to voting, in particular for institutional investors. Finally, it contains a right to ask questions at the general meeting.

The impact of increasing shareholders rights on workers is unclear, without a corresponding increase in shareholder responsibilities (e.g. disclosing of voting record), transparency in the shareholder base (so companies can identify their owners, including those with borrowed voting rights, and those with 'short interest' in the company), and incentives for long-term investment. Real progress would be made through the establishment of a special investigation right for the employee representatives’ body, as in French or Dutch law.

Links:

Commission website on shareholders' rights:

http://ec.europa.eu/internal_market/company/shareholders/indexa_en.htm

Text of the directive:

http://eur-lex.europa.eu/Notice.do?hwords=&pgs=10&list=452297:cs,&val=452297:cs&nbl=1&lang=en&pos=1&page=1

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