In future, shareholders of listed companies in EU Member States will be able to cast their votes by electronic means as well, under a new EU Directive which requires Member States to adapt their national legislation accordingly. Council President Brigitte Zypries was today able to report to her European colleagues at the Competitiveness Council that the European Parliament recently gave its approval to the proposal that was agreed upon by the Council in January. "The possibility of voting by electronic means strengthens the position of small investors and thus prevents random majorities. Moreover, the new rules will contribute to the further integration and continued stability of the European capital market," Ms Zypries stated in Brussels.
The Directive removes obstacles which previously had to be overcome by shareholders if they held shares in companies listed in other EU countries and wanted to exercise their rights there. For example, so-called "share blocking" will be abolished, whereby shareholders were prevented from trading their shares for a certain period before a company general meeting. Germany already took this step in 2005 when it amended the German Stock Corporation Act.
Over and beyond this, the Directive provides for a Europe-wide right of shareholders to ask questions, the specific details of which Member States will be able to define when implementing the Directive in national law. In principle, shareholders will have the right to ask questions regarding items on the agenda; however, national parliaments will be able to lay down certain restrictions themselves when implementing the Directive or leave this matter to be regulated in a company's articles of association, in order to ensure proper preparation and/or running of the general meeting.
Another important objective of the Directive is to increase shareholder participation at general meetings. To this end, the Directive establishes uniform rules on the appointment of a proxy to exercise voting rights on a shareholder's behalf. In future, a shareholder will be able to grant a proxy in respect of his voting rights to any person of his choice. There will also be uniform requirements in future governing which information shareholders should be entitled to prior to a general meeting. Along with the company's obligation to give shareholders information about the general meeting and the exact conditions of participation, shareholders will thus be given the practical instruments which will enable them to actively exercise their voting rights. "The days when small investors with company shareholdings in another Member State did not learn of important shareholder decisions until the day after the general meeting took place are therefore now in the past. Now every shareholder can participate in real time," said JHA Council President Brigitte Zypries, who also thanked the preceding EU Presidencies of Austria and Finland for conducting the negotiations prior to the German Council Presidency.
The European Commission submitted the proposal for the Directive, of which Germany was one of the initiators, at the beginning of last year. Once the versions of the Directive in all the EU languages have been completed, it will be formally adopted at one of the next Council meetings and subsequently published. Member States will then have a period of 24 months within which they must transpose the Directive into national law.
