From Shareholder Stewardship to Shareholder Duties: Is the Time Ripe?

Published in Shareholder's Duties (Birkmose ed., Kluwer Law International, 2016)

Nordic & European Company Law Working Paper No. 18-10

23 Pages Posted: 13 Feb 2016 Last revised: 21 Feb 2018

See all articles by Iris Chiu

Iris Chiu

University College London - Faculty of Laws; EUSFIL Jean Monnet Centre of Excellence

Dionysia Katelouzou

King's College London - The Dickson Poon School of Law; Transnational Law Institute

Date Written: April 1, 2016

Abstract

In the context of the increasing institutionalisation of global equity, this chapter examines the development of the soft law of shareholder stewardship originating in the UK Stewardship Code and provides insights into its prospective evolution into hard law standards of behaviour for institutional shareholders. We argue that the time is ripe for the development of shareholder duties on the part of institutional investors. We contend that the proposed Shareholder Rights Directive is already taking a step towards that direction by introducing a semi-hard law of a fiduciary duty to demonstrate engagement at a pan-European level. We argue that such a duty is relevant to different European jurisdictions; even if ownership structures are still rather different across the EU there is a shifting balance between traditional blockholders, such as families, and institutional investors.

Keywords: stewardship, shareholder duties, shareholder activism, institutional investors, Shareholder Rights Directive

JEL Classification: K22, G30

Suggested Citation

Chiu, Iris and Katelouzou, Dionysia, From Shareholder Stewardship to Shareholder Duties: Is the Time Ripe? (April 1, 2016). Published in Shareholder's Duties (Birkmose ed., Kluwer Law International, 2016), Nordic & European Company Law Working Paper No. 18-10, Available at SSRN: https://ssrn.com/abstract=2731241 or http://dx.doi.org/10.2139/ssrn.2731241

Iris Chiu

University College London - Faculty of Laws ( email )

Bentham House
4-8 Endsleigh Gardens
London, WC1E OEG
United Kingdom

EUSFIL Jean Monnet Centre of Excellence ( email )

Italy

Dionysia Katelouzou (Contact Author)

King's College London - The Dickson Poon School of Law ( email )

Somerset House East Wing
Strand
London, London WC2R 2LS
United Kingdom

Transnational Law Institute ( email )

London, England WC2R 2LS
United Kingdom

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