The European Council adopted a directive in early April 2017
amending the current Shareholder Rights Directive. Member states
will have up to two years to incorporate the new provisions into
domestic law. The amendments aim to encourage long-term engagement
of shareholders and increase transparency at European listed
companies. The amended directive also requires institutional
investors, asset managers and proxy advisors to be more transparent
in their shareholder engagement approach. In view of their impact
on investors' voting behaviour, proxy advisors will be subject
to a code of conduct. A further new element in the directive is
that the remuneration policy of Dutch listed companies will have to
be put to a vote at least every four years, not just when there are
amendments to the policy to consider. Another significant change
for listed companies is that shareholders will have an advisory
vote on the remuneration report. Furthermore, the company's
material transactions with related parties will have to be approved
by the shareholders or the supervisory board.
Below are links to the European Council's press release and
the amended text of the directive.
The recent case of Dickinson v NAL Realisations (Staffordshire) Ltd is a "101" guide to how not to run a small business, providing insight into the pitfalls that can await any director or shareholder...
As the Brexit negotiations start, one direct impact is an interest from clients and advisers looking to have flexibility in their organisational structure ahead of any legislative or other changes being implemented.
An assignment of rights under a contract is normally restricted to the benefit of the contract. Where a party wishes to transfer both the benefit and burden of the contract this generally needs to be done by way of a novation.
Any UK companies doing business with the rest of the EU, or even just in the UK but relying on customers and suppliers who deal with the rest of the EU, should be keeping an eye out for the ramifications of Brexit.
As of 6 April 2017, "large" businesses will be required by law to report on their UK payment practices twice per year.
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