Law to enshrine shareholder rights

SHAREHOLDERS of publicly listed companies will have greater powers to voice their opinions over the running of the firms in which they’ve invested when the Tánaiste signs into law new legislation today.

The Shareholders’ Rights Regulations 2009, which are due to be passed today, are aimed at increasing transparency at board level in public companies and making shareholder participation and access to company information easier.

Tánaiste and Minister for Enterprise, Trade and Employment Mary Coughan said the new legislation will assist shareholders in determining “whether managers are acting in the best interests of the company’s owners”.

The new regulations will mean company boards are obliged to answer all shareholder questions at general meetings and publish all documents and information from AGMs and EGMs on their websites. In addition, they provide for greater shareholder participation at general meetings by removing the need to physically attend meetings and allowing people to exercise their voting rights electronically.

Shareholders’ rights regarding a company’s appointment of proxy votes at general meetings will also be strengthened and the practice of “share blocking” – the trading in shares in the run-up to a meeting by shareholders looking to vote at the meeting – has been abolished.

Through the new laws, shareholders representing at least 5% of the voting shares in a company have the right to call a general meeting – previously such a power required a 10% share-holding – and those representing 3% or more of voting shares now have the right to put items on the agenda and to table draft resolutions for a general meeting.

Ms Couglan added that the new regulations “would assist in increasing shareholders’ understanding, activism and engagement with the companies that they own”.

The new legislation will now apply to any general meeting of publicly quoted Irish-registered companies, planned since last Thursday.

The Shareholders’ Rights Regulations basically put into effect the already existing EU Directive 2007/36/EC. The Government said that the implementation of the directive, through these new regulations, “enhances shareholder rights already contained in existing Irish company law”.