The European Commission has proposed changes to the 2007 Shareholders’ Rights Directive in order to improve corporate governance in companies that are traded in regulated markets.
Among the changes proposed include introduction of the “say on pay” remuneration policy which will give shareholders a right to vote on the remuneration policy for directors every 3 years. The EU proposes to make remuneration reports, including details of all that individual directors are granted by virtue of their appointment, accessible to shareholders and allow them to vote on it in general meetings.
The Commission also proposes that approval of the individual shareholders is necessary before passing any deals that represent over 5% of the company’s assets and those that may have a significant impact on the bottom line of the company.
In addition, it proposes use of intermediaries to allow companies to identify their shareholders without unnecessary delays, use of proxy advisors for accuracy of voting recommendations and greater transparency of asset managers and institutional advisors requiring them to disclose key investment strategies and information to shareholders at general meetings.
A copy of the proposed revised directive may be accessed by following this link: