The text of a new EU directive—designed to strengthen shareholder engagement and increase transparency in listed companies in the EU/EEA—has been agreed by the EU Council and European Parliament.
The proposed directive will amend the existing Shareholder Rights Directive (Directive 2007/36/EC) in a number of areas including: giving shareholders the right to vote on the remuneration policy of the directors of their company; encouraging shareholder engagement, by allowing companies to identify their shareholders and get information on shareholder identity from any intermediary in the chain that holds the information; requiring intermediaries to facilitate the exercise of the rights by the shareholder, including the right to take part in and vote in general meetings; and requiring material related party transactions to be approved by the shareholders or the board of the company.
After final adoption of the new directive by the council and the European Parliament next year, member states will have up to two years to incorporate the new directive into domestic law.