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01/09/2017


Amendment to the “Shareholders’ Rights” Directive

On 20 May 2017, Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 was published, amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement.

On 20 May 2017, Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 was published, amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement.

This revision to the directive aims at updating practices revealed during the financial crisis and which, by encouraging short-term returns, led to suboptimal corporate governance and performance. Directive 2017/828 introduces new provisions enabling shareholders, who are made more easily identifiable, to vote on the remuneration of the company’s directors. New transparency obligations are placed on institutional investors – such as pension funds and life insurance companies – asset managers and proxy advisors. Furthermore, some transactions, identified as having the potential to cause prejudice to the company, must give rise to a publication and be approved through procedures ensuring the protection of the interests of the company and its shareholders.

Directive 2017/828 allows Member States to adopt or maintain in force more stringent provisions to further facilitate the exercise of shareholder rights and encourage their engagement, and must be transposed before 10 June 2019.