The most recent developments in the legal framework for corporate governance increasingly focus on the monitoring role of shareholders and, more specifically, on their engagement with investee companies. These developments aim at reducing agency problems along the investment chain by enhancing equity investors' oversight and asset managers' accountability.
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Christopher Teichmann and Lothar Wolff
Shareholders are to a large extent investing in companies that are not governed by their own jurisdiction. Consequently, the enforcement of shareholders’ duties arising from national law frequently involves a cross-border element. This means that within the European Union, state measures regulating and enforcing shareholder duties will have to be assessed in the light of primary EU law, which affects practically all transnational economic activities in the Common Market.
Christian A. Witting
There is intense debate in the European Union and beyond about the current responsibilities and potential liabilities of shareholders. This chapter argues for greater attention to be paid to the design of a liability regime that incen¬tivises all participants in corporate endeavours to take appropriate measures to avoid the causation of personal injuries. The appropriate liability regime should incentivise shareholders to undertake their statutorily assigned roles in the governance of investee companies - namely, through making proper appointments to corporate boards and undertaking proper monitoring of corporate risk-imposition. The chapter argues that the only incentive that is likely to ensure that shareholders do their part is a residual personal liability for unsatisfied personal injury claims.
To understand the scope and nature of the enforcement of shareholders’ duties, it is necessary to compare this type of enforcement with that of contracts and agreements shareholders may have concluded with companies or third parties. In some cases, contractual arrangements may reinforce shareholders’ duties by providing more effective remedies. In other circumstances, contracts may clarify what other shareholders or companies expect from a shareholder or introduce obligations in addition to those mandated by law. However, some¬times, contractual obligations may also conflict with shareholders’ duties and jeopardize the performance of such duties.
Hanne S. Birkmose
Duties imposed on shareholders are no longer a rare and exotic phenomenon in European company and capital market law. Rather, they should be seen as a trend that has gained momentum since the financial crisis. Shareholders’ duties typically apply to all shareholders. However, the nature of the situation sometimes requires that duties be imposed on one or more shareholders. These duties apply to all shareholders in principle but it is a given situation that leads to imposing duties on some shareholders.
Mette Neville and Karsten Engsig Sørenson
Recently, suspension of voting rights has been introduced in the European Union through Directive 2013/50/EU. According to the amended Transparency Directive, this sanction should be available to the relevant authorities in the Member States in case of infringements of the duty to notify major sharehold¬ings. The reason for introducing this sanction is that it is considered a particu¬larly effective sanction by the Commission. This raises the question why, and for which type of infringements, this sanction is effective. These questions will be analysed further in this chapter.
Edited by Hanne S. Birkmose and Konstantinos Sergakis
Jennifer Payne and Elizabeth Howell
The focus in company law has traditionally been on shareholders’ rights rather than shareholders’ duties. While some forms of shareholders’ duties have existed for many years, this is an issue that has come to greater prominence recently. This is due to a number of factors, including a growing recognition of the need to hold institutional investors accountable to their underlying inves¬tors, a trend that is evident in recent amendments to the Shareholder Rights Directive,1 and also a recognition that corporations, and by extension their shareholders, should be held more accountable for the effect they have on soci¬etal issues such as environmental matters.
Hanne S. Birkmose and Konstantinos Sergakis
The discussion on shareholders’ duties has increasingly gained momentum in the EU and has given rise to the adoption of duties in both company law and capital markets law. However, this discussion must be extended further if the duties that are increasingly imposed on shareholders are to have a genuine effect on the viability of the recent regulatory developments in this area.