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Verica Hadzi Vasileva-Markovska. Macedonian Institute of Directors Brussels, 17.12.2013. Key provisions of the shareholders Directive 2007/36/EC. Equal treatment of shareholders Information prior to the general meeting

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verica hadzi vasileva markovska

Verica Hadzi Vasileva-Markovska

Macedonian Institute of Directors

Brussels, 17.12.2013

key provisions of the shareholders directive 2007 36 ec
Key provisions of the shareholders Directive 2007/36/EC
  • Equal treatment of shareholders
  • Information prior to the general meeting
    • Minimum notice period of 21 days for most GMs, which can be reduced to 14 days if voted electronically and the if general meeting agrees;
    • Internet publication of the convocation and documents to be submitted to the GM at least 21 days before the GM;
  • Right to put items on the agenda of the general meeting and to table draft resolutions
    • shareholders have right to put items on the agenda of the GM, accompanied by a justification or a draft resolution to be adopted in the GM;
    • shareholders have right to table draft resolutions for items included or to be included on the agenda of a GM.
    • minimum stake for filing such rights shall not exceed 5% of the share capital.
key provisions continued
Key provisions (continued)
  • Requirements for participation and voting in the general meeting
    • Abolition of share blocking and introduction of a record date in all Member States which may not be more than 30 days before the GM;
  • Participation in the general meeting by electronic means
    • Abolition of obstacles on electronic participation to the GM, including electronic voting
  • Right to ask questions
    • and obligation on the part of the company to answer questions
key provisions continued1
Key provisions (continued)
  • Proxy voting
    • Abolition of existing constraints on the eligibility of people to act as proxy holder and of excessive formal requirements for the appointment of the proxy holder
  • Voting by correspondence
    • Permission to companies to offer their shareholders the possibility to vote by correspondence in advance of the GM
  • Removal of certain impediments to the effective exercise of voting rights
  • Voting results
    • Disclosure of the voting results on the Company's internet site within15 days of the GM.
areas were more should be done
Areas were more should be done
  • Shareholder engagement
  • “Long-term” shareholder engagement
  • Transparency of voting policies and engagement policies
  • Proxy Advisors
  • Remuneration
  • Cross border / Electronic voting
  • Better oversight of related parties transactions by shareholders
main policy objectives
Main policy objectives?
  • To make shareholders more engaged and thus make companies more sustainable from a corporate governance perspective.
  • Main operational objectives:
    • Raise awareness of investors’ corporate governance drives
      • to improve disclosure of voting policies by institutional investors,
      • to enable ultimate investors to optimise investment decisions,
      • to facilitate dialogue between investors and companies and
      • to encourage shareholder engagement.
    • Better oversight on remuneration policies and remuneration of managers
      • harmonisationof disclosure requirements
      • mandatory shareholder vote on the remuneration policy and the remuneration report.
    • Improving shareholder control over management
      • enhance the shareholder oversight on related party transactions.
      • grant shareholders a right of approval for most significant transactions.
    • Require better transparency by proxy advisors
      • methodology for the preparation of their advice and
      • their possible conflicts of interests.
case of macedonia
Case of Macedonia
  • Procedure for approval of transaction with related party in a shareholding company listed on an authorised Stock Exchange
    • Changes in the Trading Companies Law (Official Gazette 26/12/2012)
  • Procedure for examination / control of the accounting records and company’s activities
    • Changes in the Trading Companies Law (Official Gazette 16/05/2013)
oversight of related parties transaction by shareholders
Oversight of related parties transaction by shareholders
  • For all transactions higher than 10% of the Company’s assets as presented in the Company’s last year audited financial statements, an authorized auditor needs to provide an opinion prior to the transaction.
  • The opinion needs to examine the following:
    • whether the transaction has been made in compliance with the Law
    • whether the transaction is fair and arm’s length,
    • whether the transactions between the parties are proportionate and not favourable or damaging for some of the parties.
  • Transactions for which no opinion is needed are:
    • Payment of dividend,
    • Issue of shares,
    • Financial services for companies providing such services that are regulated by regulators.
  • Annulation of transactions with related parties
    • A shareholder can initiate a Court procedure to annul a transaction if the shareholder believes that the transaction was damaging to the company.
    • Within a year of becoming aware of such agreement, but not longer than 3 years of the decision for the transaction.
    • If the transaction is annulled, the related party needs to indemnify the Company.
possibility of direct control by shareholders
Possibility of direct control by shareholders
  • Procedure for examination / control of the accounting records and company’s activities
  • Shareholder or group of shareholders with more than 10% of the equity can ask to have access to the accounting records and to appoint auditor to check for some irregularities.
  • Shareholders can ask the Court to appoint an auditor if the shareholders’ assembly was not gathered within 8 days of the request for gathering and if the assembly refuses to appoint an auditor.
  • The appointed auditor should not have independence issues with the Company or its shareholders and has not provided consultancy services within the tree previous years to the company.
  • Costs of appointment of new auditors are covered by the shareholders proposing the audit. Costs will be reimbursed by the Company if the irregularities are confirmed.
  • Request for new audit can be made within a year of becoming aware of irregularities.
  • The auditor cannot access the information relating to patents, royalties, intellectual rights.