Shareholder Rights Directive
The EU Shareholder Rights Directive is a grand title but on close analysis it does not add much to the armoury of a UK shareholder aggrieved with the company in which they hold shares.
Consequently it has been implemented in the UK (via the Companies (Shareholders’ Rights) Regulations 2009 with relatively little fanfare. The main reason for the lack of excitement is that the regulations generally only apply to “traded companies” and they only marginally increase shareholders rights or powers overall.
Traded companies means publicly quoted companies and does not include, for example, companies listed on AIM.
In relation to traded companies there are new rules relating to the holding of AGMs giving shareholders more notice and information, a right to add agenda items and ask questions.
Otherwise the regulations make some minor changes to shareholder participation in company meetings. In summary:
- it simplifies the position with regard to proxy voting
- it enables a company to employ electronic participation in general meetings
- 5% rather than 10% of shareholders can now require a general meeting to be held
Essentially the regulations amount to some useful tinkering but the real power in companies will continue to reside squarely in the hands of the directors.
Tags: shareholder rights, shareholders rights
Corporate Governance, shareholders rights | Ed Weeks | 
November 13, 2009 6:56 pm
Subscribe