EU Directive on Shareholder Voting Rights Moves Forward

‘The European Parliament has reached agreement in a single reading on the European Commission’s proposal for a Directive on shareholder voting rights. According to Internal Market Commissioner Charlie McCreevy, the agreement is another step towards the goal of ensuring that shareholders, no matter where in the EU they reside, have timely access to complete information and simple means to exercise voting and other rights at a distance.

On average, about one-third of the share capital of EU listed companies is held by non-residents. Key obstacles to voting faced by non-resident shareholders include share blocking, insufficient or late access to information, and burdensome requirements on distance voting. The Directive would eliminate the main obstacles in the cross-border voting process and enhance other rights of shareholders.

More specifically, under the Directive, general meetings should be convened with at least one month's notice. All relevant information should be available on that date at the latest, and posted on the issuer's website. The meeting notice should contain all necessary information. Share blocking should be abolished and replaced by a record date which should be set no earlier than 30 days before the meeting. Further, the right to ask questions would be accessible to non-residents.

The maximum shareholding thresholds to benefit from the right to table resolutions would not exceed 5%, in order to open this right to a greater number of shareholders while preserving the good order of general meetings. In addition, proxy voting would not be subject to excessive administrative requirements, nor unduly restricted. A principle of the Directive is that shareholders should have a choice of methods for distance voting. Moreover, voting results should be available to all shareholders and posted on the issuer's website.