The new Shareholder Rights Directive, which is to be implemented by member states by August 2009, may necessitate listed companies taking action if they want to be able to continue to hold EGM's on 14 days' notice.

The Directive provides that 21 days' notice will now be required for EGM's of listed companies as well as for their AGM's. Currently under Irish law, AGM's must be held on 21 days' notice but EGM's can be held on 14 days' notice only (unless a longer period is specified in the company's articles of association).

However the Directive also provides that member states can opt to permit listed companies to continue to call EGM's on 14 days' notice if:

  1. the company's shareholders pass a resolution at an AGM approving this; and
  1. the company provides for electronic voting by members.

The Department of Enterprise, Trade and Employment has today indicated to us that Ireland will, like the UK, take up this option to allow listed companies retain the power to hold EGM's on 14 days' notice.

We are not yet sure of what will be required to provide for electronic voting by members. However this is something which can be dealt with later by each company affected. The key issue now as regards timing is the passing of the shareholders' resolution. This must be done at an AGM. Accordingly, listed companies may want to provide for such resolution to be passed at their next AGM, if possible in advance of the coming into effect of the provisions of the Directive in Ireland, which the DETE have confirmed will be no sooner than the deadline of August. If the resolution is left to the company's next AGM following August, there will be a time period during which the company will not be able to hold EGM's on the shorter notice of 14 days.