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Brussels, 12 June 2007

Corporate governance: Directive on shareholders' rights formally adopted

The European Commission has welcomed the Council's formal adoption of the Directive on the exercise of shareholders' rights, which means that the Directive is now officially part of EU law. This key measure will enable shareholders of listed companies throughout the European Union to exercise their rights and have their say. The formal adoption follows agreement at first reading by the Council and the European Parliament in February 2007. Member States now have two years to implement the Directive in their national laws.

Internal Market and Services Commissioner Charlie McCreevy said: "I congratulate all parties on the swift adoption of this Directive and call upon Member States to ensure equally swift implementation at national level. These new rules will mean that shareholders, no matter where they are located in the EU, can have their say about the way companies are run and can hold management accountable. This is good news for all shareholders, for the integration of EU financial markets and for the economy as a whole."

The Directive introduces minimum standards to ensure that shareholders of companies whose shares are traded on a regulated market have a timely access to the relevant information ahead of the general meeting (GM) and simple means to vote at a distance. It also abolishes share blocking and introduces minimum standards for the rights to ask questions, put items on the GM agenda and table resolutions. The Directive allows Member States to take additional measures to facilitate further the exercise of the rights referred to in the Directive.

The Directive features the following key provisions:

  • Minimum notice period of 21 days for most GMs, which can be reduced to 14 days where shareholders can vote by electronic means and the general meeting agrees to the shortened convocation period;
  • Internet publication of the convocation and of the documents to be submitted to the GM at least 21 days before the GM;
  • Abolition of share blocking and introduction of a record date in all Member States which may not be more than 30 days before the GM;
  • Abolition of obstacles on electronic participation to the GM, including electronic voting;
  • Right to ask questions and obligation on the part of the company to answer questions;
  • Abolition of existing constraints on the eligibility of people to act as proxy holder and of excessive formal requirements for the appointment of the proxy holder;
  • Disclosure of the voting results on the issuer's internet site.

The Commission proposed the Directive in January 2006 (IP/06/10). The Council of Ministers and the European Parliament reached agreement on the content of the future Directive in a single reading in February 2007 (IP/07/193). In May 2007 the Commission also published a consultation paper regarding a possible Commission recommendation on shareholders' rights that could complement the rules of the Directive.

More information on the Directive and the consultation is available at:

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