A proposal to revise the existing Shareholder Rights Directive (2007/36/EC) has been agreed at EU level. The 2007 Directive sought to improve corporate governance in companies traded on an EU regulated market by ensuring that shareholders could exercise their voting rights and rights to information across borders.
The revisions to the Directive were proposed to tackle perceived corporate governance shortcomings in listed companies in the EU and to further encourage transparency and shareholder activism.
Key aspects of the revised 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 Directive will shortly be formally adopted by the European Parliament and Council. It will then be published in the Official Journal of the European Union, after which Member States will have two years to transpose the provisions into domestic law.