The Shareholders' Rights Directive will be introduced into UK law in August 2009. According to the Department for Business Enterprise and Regulatory Reform (‘BERR'), which is responsible for implementing the Directive, the aim is to: ‘improve corporate governance in EU companies traded on regulated markets by enabling shareholders to exercise their voting rights and rights to information across borders'.
Many of the provisions in the Directive are already in force in the UK, through the existing legal and governance framework. BERR is currently consulting on the following changes which, when agreed, will be implemented through amendments to the Companies Act 2006:
advance notice and prior information for meetings
Companies will be required to give 21 days' Notice for Annual General Meetings, and 14 days for General Meetings (previously Extraordinary General Meetings) and to publish documents relating to the meeting on the internet.
the abolition of "share blocking"
The UK system, whereby shareholders or their proxies are "validated" for voting on a date before a company's general meeting and shares can be traded after that date, will now be formally adopted into UK law.
removal of legal obstacles to electronic participation
UK quoted companies already make wide use of voting by electronic means and this will now be expressly permitted within the Companies Act.
shareholders' rights to ask questions at meetings
An obligation on a company to answer questions at general meetings will be included in the Companies Act, which will formalise the arrangements in a company's memorandum and articles.
voting by proxy
BERR is planning various changes to the requirements relating to proxy voting in order to clarify the position for nominee shareholders voting by proxy and to enable shareholders to vote directly by correspondence without appointing a proxy.
members' powers to require directors to call general meetings
This provision, which sets the minimum share capital required to exercise the power will cover all companies (not just traded companies) in order to maintain consistency.
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