Shareholders' Fundamental Rights in Listed Companies: Some Relevant and Some Undesirable EU Initiatives

There can be no reasonable doubt that the EU’s initiatives in the field of shareholders’ fundamental rights in listed companies are among the successful, relevant and necessary provisions under EU corporate and stock exchange law. This also holds true for the main Directive 2007/36. When considering the whole spirit and idea of the EU and its competences, the field of basic shareholders’ rights, including cross-border shareholding, is to be regarded as a welcome initiative that has facilitated the exercise of fundamental rights also in cross-border shareholding. The success is further emphasized by the fact that some countries, including Denmark, have regarded a number of the fundamental rights vested in the directive as being so well formulated that the countries have chosen to gold-plate their own legislation by introducing rights which are similar to those in the directive also for non-listed companies, even including both public limited companies and private limited companies. When it comes to the suggested amendments, cf. COM (2014) 213 final, my approach to this is somewhat different. The very fine main Directive on fundamental rights is now being diluted through the adoption of numerous provisions on intermediaries, asset managers and proxy advisors, the certain way of castrating a hitherto useful and powerful directive, which could have moved on from being a directive into being eventually a powerful regulation, a “bible” for shareholders in listed companies. One could exploit this as an opportunity to rethink some of the provisions in the directive – which is, after all, 10 years old today – concerning the digital exercise of fundamental rights, e.g. by creating the same kind of pampering of shareholders as is applied today concerning analysts; they can very often participate electronically in video sessions, meetings with board and management, etc., and why not demand from listed companies that this be arranged also in listed companies. There is no doubt that the total value of European listed shares will increase the more it is facilitated to follow the individual company’s development by taking the pulse of the company and its general meetings. One should in my opinion simply 1) keep the directive basically as it is, perhaps with the adjustments mentioned immediately above, 2) consider changing the EU provisions on fundamental shareholders’ rights into a regulation, instead of a directive, thereby following the path that has been shown in other important fields where ‘harmonisation’ is not enough, but where parallel European law is desirable (e.g. in the field of market abuse, data protection etc.), and finally 3) keep the vast majority of the technical rules included in COM (2014) 213 final in a separate set of provisions, be it the the form of a directive or a regulation. It might even develop to a short and popular ‘shareholders’ bible’ across all European borders, thereby taking advantage of the simple fact that common tangible economic goods have a tendency to unite us. Such a development will be entirely within the spirit of our colleague and friend, Professor Adriaan Dorresteijn.