Directors' liability discharge proposals - report published

Manifest, in conjunction with Morley Fund Management, has published a report titled "Directors' liability discharge proposals: the implications for shareholders". The report, to quote directly from it: 

.... addresses what for many investors has been a largely obscure issue, namely proposals to discharge directors of liabilities that routinely appear on shareholder meetings’ agendas in many European markets. We look at 13 European markets that have resolutions of this type – Austria, Belgium, Denmark, Finland, France, Germany, Greece, Luxembourg, the Netherlands, Portugal, Spain, Sweden and Switzerland; their legal basis and practical implications for shareholders in the voting context".

Europe: the harmonisation of insolvency law

INSOL Europe recently published a report titled Harmonisation of Insolvency Law at EU Law Level: see here (pdf). The report outlines differences between national insolvency laws which create difficulties for companies having cross-border activities or ownership within the EU and identifies areas where harmonisation would be desirable. The report also considers the extent to which the harmonisation of insolvency law could facilitate further harmonisation of company law.

The report contains surveys of the insolvency regimes in the UK, Poland, France, Germany, Spain, Italy and Sweden. References are also made to the law in Belgium and the Netherlands.

Europe: implementation of the Shareholder Rights Directive

The European Commission has announced that it has referred Belgium, Cyprus, Greece, Spain, France, Luxembourg, The Netherlands and Sweden to the Court of Justice for late implementation of the Shareholder Rights Directive (2007/36/EC): see here. In its press release the Commission states:

The Shareholders' Rights Directive introduces minimum standards to ensure that shareholders of companies whose shares are traded on an EU regulated market have timely access to the relevant information ahead of the general meeting and simple means to vote at a distance. The publication of documents on the internet as well as enabling proxy voting and electronic participation are important elements of this. The Directive also abolishes share blocking and introduces minimum standards for the rights to ask questions, put items on the general meeting agenda and table resolutions.

While nineteen Member States have already fully implemented the Directive, eight Member States (Belgium, Cyprus, Greece, Spain, France, Luxembourg, The Netherlands and Sweden) still have to implement some or all of its provisions. Incomplete implementation means that shareholders in those Member states do not enjoy the same rights as elsewhere in Europe and are denied the rights the Directive gives them when investing in publicly listed companies. The deadline for implementation was 3 August 2009".

ICGN Newsletter published - sovereign wealth funds and Swedish corporate governance

The June 2008 issue of the International Corporate Governance Network Newsletter has been published. The leading article concerns sovereign wealth funds and there is also a short piece on corporate governance in Sweden. The latter highlights some important differences between the Swedish model and the approach taken in other countries.

Note: On 1 July 2008, a new version of the Swedish Corporate Governance Code came into force - see here. For background information, including a comparison between the new Code and its predecessor, see here.

Denmark: private equity and transparency

The Danish Venture Capital and Private Equity Association has published "Active ownership and transparency in private equity funds: guidelines for responsible ownership and good corporate governance". The guidelines, which operate on the 'comply or explain' basis, contain rules governing the disclosure of information to supplement the requirements, where relevant, of the Danish Financial Statements Act.  In the report it is stated:

...it has to be recognised that today’s private equity funds own companies that may be of broad interest to society. These may be companies that are important for infrastructure or play a major role in the local area. They may also be companies that employ large numbers of people. In addition, many investors in private equity funds are pension funds, whose most important stakeholders are pension savers – typically ordinary salary earners. The general public may therefore have an interest in gaining insight into how a private equity fund works and creates value. This is the background to why these guidelines specify a number of areas where private equity funds and their portfolio companies should publish information.

According to a report in the Financial Times newspaper:

Denmark has leapfrogged the UK and adopted the most far-reaching guidelines to improve the transparency of private equity funds. The new voluntary code ... is designed to rehabilitate the reputation of private equity in Denmark, but will also increase pressure on the industry in the rest of Europe to follow suit to avert the threat of national or EU imposed rules. The UK and Sweden have already published voluntary guidelines to try to head off such rules but the DVCA's proposals go much further by covering 80 per cent of private equity-owned companies - compared to just the 100 largest under the UK guidelines - and requiring a far higher level of disclosure."

For further information see:

DVCPEA | Guidelines | Financial Times report | 

Executive pay

Several recent posts on this blog (here and here, for example) have highlighted the debate about executive pay in America and Europe. This debate is considered in a couple of articles in this week's Economist. In the first, "Let the fight begin", it is argued that shareholder "say on pay" votes should become the norm and are preferable to Government intervention (it would be surprising if The Economist argued otherwise). In the second, "Pay attention", there is discussion of the debate about executive pay in Europe and the development of "say on pay" rules within the European Member States. The article notes:

By law in the Netherlands, Sweden and Norway, shareholders get a binding vote on compensation packages; in Britain they get a non-binding vote. Some Spanish and Swiss firms are voluntarily starting to offer shareholders a vote".

Sweden: revised corporate governance code

The Swedish Corporate Governance Board has announced that the Swedish Corporate Governance Code has been revised to take into account the European Commission's recommendation on directors' remuneration in listed companies (C (2009) 3177, 30 April 2009) and changes in Swedish legislation. The new Code comes into force on 1 February 2010 and is available here (in Swedish); a copy in English will be published here shortly.

Sweden: the revised corporate governance code

A copy, in English, of the revised Swedish Corporate Governance Code has been published by the Swedish Corporate Governance Board: see here. The Code comes into force on 1 February 2010. 

Sweden: takeovers and equality of treatment for shareholders - ICGN position

The ICGN has published its letter to the chairman of the Näringslivets Börskommitté with regard to the latter's review of shareholder equality during takeovers. In its letter the ICGN explains its concern that shareholders facing the same level of economic risk, but with greater voting rights, can receive a higher price for their shares. The ICGN notes:

We recognise that in most takeovers of companies listed on the Stockholm Stock Exchange shareholders with the same economic rights in the company do get equal treatment. However, that this is not always the case does suggest that the rules need to be fine-tuned. Doing so should provide some confidence to shareholders, both Swedish and foreign, that their interests are protected in takeover and other acquisition situations. This is not a substitute of applying the principle of proportionality".