What is Shareholders' Rights Directive?

The Shareholders’ Rights Directive will become part of UK law in August 2009. According to BERR, the Directive’s aim is to: ‘improve corporate governance in EU companies traded on regulated markets by enabling shareholders to exercise their voting rights and rights to information across borders’.

Many of the provisions in the Directive are already in force in the UK, through the existing legal and governance framework. BERR is currently consulting on the following changes which, when agreed, will be implemented through amendments to the Companies Act 2006:

· advance notice and prior information for meetings
· the abolition of “share blocking”
· removal of legal obstacles to electronic participation
· shareholders’ rights to ask questions at meetings
· voting by proxy
· members’ powers to require directors to call general meetings.