Background

Shareholders have financial rights in the form of dividends. But they also have other rights associated to their status as owners of companies. These include the right to vote at Annual General Meetings, the right to ask questions at those meetings and also the right to propose resolutions.

Shareholders in the field of SRI consider a good governance framework to be paramount to an accountable economic system, where investors and companies each have their rights, roles and responsibilities towards each other and society. Active SRI shareholders are long term investors who pay particular attention to how extra-financial issues, such as governance, social or environmental risks, may affect company performance. This attention translates into regular interaction with investee companies and participation in AGMs and voting to the extent that it is possible and there is a proper framework of shareholders rights. However, these rights do not exist in equal terms in each European country and it is particularly difficult to exert these rights across borders.

(see Eurosif’s Active ownership handbook for more details)

Eurosif position

Eurosif believes that shareholders could provide a greater contribution to sustainability, provided they were given appropriate means to be responsible owners, i.e. that their shareholder rights be respected. As a result, Eurosif supports regulations which bring more clarity to the role of shareholders in companies and particularly those regulations which allow shareholders to express their views during or around shareholder meetings.

Eurosif welcomes and supports many of the initiatives put forward by the European Commission with regards to:
- Clarifying the chain of intermediaries and identifying ultimate investors;
- Providing proper and timely information dissemination to investors ahead of AGMs;
- Allowing investors to voice their support or their concerns through voting, tabling resolutions or calling EGMs;
- Taking consideration of the difficulty for investors to take part in all AGMs and therefore providing as much leeway as possible for voting in absentia;
- Allowing active shareholders to communicate among each other prior to AGMs.

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