Ireland Enhances Shareholders' Rights

by Jason Gorringe, Tax-News.com, London

12 August 2009

The Irish Vice President and Minister for Enterprise, Trade and Employment, Mary Coughlan, on August 10, 2009, announced the enactment of new regulations that will make it easier for the shareholders of publicly-listed companies to hold management to account and have their say about the way such companies are run.

The Shareholders’ Rights (Directive 2007/36/EC) Regulations 2009 introduce new rights for shareholders and provide for timely access to company information, says Coughlan. They also promote the use of simplified electronic or internet-based means for shareholders to exercise their right to vote at general meetings of publicly-listed companies, she says.

Announcing their commencement, Coughlan noted that the new Regulations would assist in increasing shareholders’ understanding, activism and engagement with the companies that they own.

Coughlan added that providing increased transparency and making shareholder participation simpler, would further enhance the government’s corporate governance regime. The regulations will assist shareholders in determining whether managers are acting in the best interests of the company’s owners, she states.

According to Coughlan the regulations will:

  • Allow shareholders to participate in meetings without needing to physically attend meetings, notably through exercising voting rights electronically;
  • Obligate companies to answer shareholders’ questions at general meetings;
  • Obligate companies to publish documents and information regarding a general meeting on their website, including the result of votes taken;
  • Allow 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);
  • Allow 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
  • Strengthen 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 in 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 give effect to EU Directive 2007/36/EC and apply to companies that have their registered office in Ireland and whose shares are admitted to trading on a regulated market situated or operating within a Member State.

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