On 9 December 2016, the EU’s committee of permanent representatives (COREPER) endorsed an agreement between the Slovak presidency and European Parliament representatives to strengthen shareholders engagement in big European companies (read, here). The agreement will encourage transparent and active engagement by shareholders of listed companies through a revision of the existing Shareholders’ Rights Directive (2007/36/EC). The revised directive is intended to redress excessive short-term risk-taking by managers and contribute to the sustainability of companies, which will in turn help generate growth and create jobs. The new directive establishes specific requirements to encourage shareholder engagement in the long term and increase transparency. These requirements apply to:
- remuneration of directors;
- identification of shareholders;
- facilitation of exercise of shareholders rights;
- transmission of information;
- transparency for institutional investors, asset managers and proxy advisors;
- related party transactions.
Following the final adoption by the Council and the European Parliament next year, the revised directive will be published in the EU’s Official Journal. The new rules are set to come into force two years after they have been formally signed off by the EU. The proposal can be consulted here.
Corporate Finance Lab 