This chapter examines the effects of ‘say on pay’, more particularly, how companies in Europe respond to dissenting votes on executive remuneration. It aims to contribute to the scholarly literature on the subject, focusing particularly on the developments and trends in the UK and Belgium. The chapter presents studies of the effects of the voting down of remuneration reports, and suggests improvements to the existing system. The recommendations include new regulation in Belgium to provide more detailed guidelines for companies in dealing with negative votes and a two-strike system for say on pay. In the two-strike system, if a company fails the advisory shareholder vote on remuneration, the next vote should be binding. To seek the second vote, the company must amend remuneration practices so they address shareholder concerns.
Christoph Van der Elst
Anne Lafarre and Christoph Van der Elst
This chapter looks at how legal tech can offer smart solutions for classical corporate governance inefficiencies, like the agency problem and the old-fashioned Annual General Meeting of Shareholders (hereinafter: the AGM). This chapter focusses on the smart solutions of legal tech, thereby investigating and critically assessing its benefits and risks in the field of corporate governance and the AGM. The chapter provides a general introduction to the agency problem and the associated agency costs between shareholders and their corporate board members in corporate governance and introduces blockchain technology as a solution to the agency problem, thereby discussing the decentralized autonomous organization (hereinafter: The DAO). Although blockchain offers the possibility to create a decentralized peer-to-peer network, we will see that The DAO had still some governance problems. Therefore, the authors consider blockchain and smart contracting technology to decrease the monitoring and bonding costs of companies, by introducing and evaluating a blockchain based AGM.