The new European shareholder rights directive: removing barriers and creating opportunities for more shareholder activism and democracy

摘要

Shareholder activism has increased within the last years. Traditionally, minority shareholders voted by their feet if they disagreed with managements actions. However, this has certainly changed due to the development of Internet based technologies as well as the emergence of hedge funds and other active institutional investors. As a consequence, listed firms' costs of communicating with investors globally have increased, specifically the budget of investor relation departments. The EU Commission has recently issued a Directive on shareholders rights which will become part of European Law next year recognizing that cross-border voting should be solved as a matter of urgency. This article analyses the nature of shareholder activism in the light of the new Directive arguing that the Directive is only the first step in a legal process that is expected to substantially increase shareholders' rights in the coming years. The article also presents the notion of shareholder democracy that is crucially dependent on active minority shareholders. It is argued that the notion of shareholder democracy may serve as guidance for how future legislation should be designed.