Ireland is to implement the EU Directive on shareholders rights, which dates from July 2007. Tánaiste and Minister for Enterprise, Trade and Employment, Mary Coughlan, in the latest publicity announcement, as a stand-in for the Taoiseach, who is on holidays, said she will today "sign into Irish law" the Directive that should make it easier for shareholders of stock market companies to hold management to account and have their say about the way the businesses are run.
The Shareholders’ Rights Regulations 2009 introduces new rights for investors and aims to provide for more timely access to company information.
The new regulations will assist in increasing shareholders’ understanding, activism and engagement with the companies that they own. Coughlan said that providing for increased transparency and making shareholder participation simpler would further enhance our corporate governance regime. She said it would assist shareholders determine whether managers are acting in the best interests of the company’s owners.
Principal among the changes introduced by the Regulations are: -
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Providing for shareholder participation across borders without the need to physically attend meetings, notably through the exercising of voting rights electronically;
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Obliging companies to answer shareholders’ questions at general meetings;
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Obliging companies to publish documents and information regarding a general meeting on their website, including the result of votes taken;
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Allowing shareholders representing at least 5% of the voting shares in a company the right to call a general meeting (previously a holding of 10% was required);
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Allowing shareholders representing at least 3% of the voting shares in a company the right to put items on the agenda and table draft resolutions for a general meeting; and
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Strengthening shareholders’ rights in relation to the appointment of proxies at general meetings.
The regulations also abolish “share blocking” (a prohibition on trading in shares in the run-up to a meeting by shareholders intent on participating and voting at such a meeting) and replaces it with a simplified procedure whereby a shareholder’s rights are based on the shares held by him/her on a specified date prior to the general meeting (to be known as a record date).
The regulations will apply to companies that have their registered office in Ireland and whose shares are admitted to trading on a regulated market operating in an EU state.
The directive must be implemented in EU states this month.
