Position paper

EU wants to strengthen shareholders rights

The German insurance industry supports the efforts of the European Commission to strengthen the rights of shareholders through additional legislative measures. Some of the provisions of the proposal are, however, not adequate to achieve this objective.

The German insurance industry is particularly concerned about the provisions on transactions between a company and the parties related to it (“related party transactions”). These provisions are disproportionate. They would create a large administrative burden without providing significant benefits to shareholders and companies. As a result, general meetings of shareholders might be overloaded with decisions and it will become almost impossible for companies to operate on the transaction market on short notice. Taking quick actions is often required in this context. In order to avoid unnecessary administrative burdens, a general exception should apply to intragroup issues.

The provisions on the remuneration policy are also overly bureaucratic and to far-reaching. Moreover, the role of the supervisory body in twotier company law systems within the EU must not be marginalised within the scope of the envisaged voting on the remuneration policy by the shareholders at the general meeting. In addition, supervisory provisions on the issue of remuneration have already been established in the insurance industry, so that a conflict with company law provisions is to be expected. An exception should therefore be provided for industries which are subject to specific supervision, already.

The proposed measures on an improved identification of shareholders and on enhanced transparency requirements for proxy advisors are welcomed. In the context of the new transparency requirements we are concerned about the fact that all institutional investors shall be required to disclose their investment strategy and that the engagement of all shareholders shall be integrated in their investment strategy. Apart from the lack of practical constrains, these obligations are not feasible for factual and legal reasons. Due to the fact that the shareholder structure is continuously changing, integrating the engagement of the other shareholders in the investment strategy is impossible. Moreover, such an approach is contrary to the principles of European competition law. We also object to the idea that shareholders shall be urged to cooperate with each other.

The GDV’s complete comments are available in the download section.


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Position Paper

shareholders rights