Questioning the Board of Directors - How the Shareholder Can Become a Steward

Abstract

The European Shareholder Rights Directive provides shareholders the right to ask questions related to the items on the agenda. The company can refuse to answer the questions in a limited number of cases. After a brief historical and European view, the second part of the paper assesses the transposition of the directive in five Western European countries and shows that the directive partially harmonizes this (universal) shareholder right but path dependent national developments continue to exist. The next part confirms for a large group of Dutch companies the importance of this right for – in particular – smaller shareholders. The mean number of questions per meeting is twenty-five, with an underrepresented number of questions of institutional investors. We conclude by making a plea for an integrated discussion platform for all kinds of investors.

Keywords: general meeting of shareholders, right to ask questions, shareholder activism, EC shareholder rights directive

JEL Classification: G38, K20, K22