Proposition 53K0421

Projet de loi concernant l'exercice de certains droits des actionnaires de sociétés cotées.

General information ¶

Submitted by

CD&V Leterme Ⅱ

Submission date

Oct. 20, 2010

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

EC Directive shareholder firm governed by commercial law organisation

Voting ¶

Voted to adopt

Groen CD&V Vooruit Ecolo LE PS | SP ∉ Open Vld N-VA LDD MR VB

Contact form ¶

Do you have a question or request regarding this proposition? Select the most appropriate option for your request and I will get back to you shortly.

Discussion ¶

Nov. 25, 2010 | Plenary session (Chamber of representatives)

Full source

The draft law, which is presented for adoption today, provides for the transposition into Belgian law of a Directive of the European Community no. 36 of 2007. It concerns the exercise of certain rights associated with shares with voting rights by shareholders in connection with the general meetings of those companies.

The Directive introduces a number of rules for the calling of the general assembly and for the participation in that general assembly. Furthermore, there are detailed rules for the organization of a general meeting and the exercise of the right to vote. The measures apply only to companies that are listed on the stock exchange.

The main lines of the bill are as follows. There are two important innovations, which I would like to bring to your attention.

A first major novelty is the right to include new topics on the agenda of the general meeting and to submit proposals for decisions on the items included or to be included on the agenda of a general meeting. Until now, that right was reserved for shareholders who have the right to convene a general meeting, which is the case when they own 20 % of the capital. In accordance with the European directive, rights are therefore recognized, regardless of whether the shareholders are able to convene a general meeting. In order to exercise that right, one or more shareholders must together hold 3 % of the company’s share capital.

Another important novelty is the possibility for companies to regulate statutory distance participation in their general meetings. In so far as such participation in general meetings can lead to an increase in the number of shareholders participating in general meetings, it seemed appropriate to open that possibility to all forms of companies. It means that shareholders may be allowed to participate in the general meeting of a listed company through an electronic means of communication made available by the company.

Another novelty is the access to the general meeting which will only be granted if the shares held by the shareholder are registered on a date that falls before the general meeting, which is called the registration date. There are other new aspects, which the directive introduces in Belgian legislation, at least if we proceed to do so.

We discussed this issue in the Committee on Commercial Law. I will give some opinions. A first general opinion was from colleague Déom of the PS, who stated to be satisfied that the bill strengthens the position of the shareholders. However, she regretted that the new arrangement does not require remote participation in the general meeting.

Col. George noted that the State Council assumes that where participation by electronic means is possible, shareholders should also be able to participate in the deliberations and ask questions. However, the government has not intervened on this. The draft law explicitly stipulates that the statutes may provide that a shareholder who participates remotely in the general meeting, in addition, has the possibility to participate in the discussion by electronic means and to ask questions. In other words, it is an opportunity issue. The Minister’s co-worker also confirmed and clarified that the legal provision imposes a minimum scheme.

Another general view was from colleague Clarinval. He supports the draft law in general and more specifically in terms of its optional character. This gives companies a certain freedom of judgment. He requested clarification of the technical means to guarantee the confidentiality of the voting. The Minister has clarified several technical systems and indicated that confidentiality will remain fully guaranteed.

There were a number of specific questions to which a number of amendments were also linked. For example, I myself submitted an amendment to apply the transposition of the directive into this draft law to provide legal provisions allowing representatives of consumer organisations, trade unions, environmental associations, etc. to attend annual shareholders’ meetings with an advisory voice and to arrange this in a decent manner. Representatives of such associations can now buy a share in order to in practice set up the general meeting of a company. This often occurs now in a kind of hostile attitude against each other. The peace movement has done so in the past, among others with the company Barco. I must note that the word peace islands is mistakenly used in the report. This is about the peace movement.

I am convinced that this amendment will benefit the understanding between interest associations and partners. I have been supported by colleague Gerkens of Ecolo/Groen!. According to the Minister, we must not lose sight of the fact that there are already many groups involved in the annual meeting, for example the business council. The general meeting is not the right place to engage stakeholders in the company.

Mr. Uyttersprot asked in the committee whether the general meeting is such a suitable forum to involve stakeholders. Why – he asks himself – can’t an open corporate council be organized that can be attended by stakeholders? As a second alternative, colleague Uyttersprot thought of organizing a consultation moment before or after the general meeting.

The amendments in question were rejected with 14 votes against, 2 votes for and 1 abstinence.

The amendments of colleagues Uyttersprot and Wouters were very specific. They proposed that the call for the general meeting should specify the language in which the report would be drafted and, where applicable, the language or languages in which the presentations could take place. The Minister has argued that this should not be included in the Company Code and that the general rules for the use of languages in companies already specify in which language all this should be done.

The amendment was rejected with 11 votes against, 5 votes for and 1 abstinence.

Colleagues Uyttersprot and Wouters have also submitted an amendment on paragraph 2 which states “in the media which can reasonably be accepted”. That could create legal disputes because it is quite vague. The Minister explained that these terms are not new and that the legislator intentionally did not want to go too retail, in order to allow the companies to select the most suitable media themselves. This amendment was also rejected with 11 votes against, 4 votes for and 2 abstentions.

Another specific comment was made by colleague George who pointed out that the text of Article 19 was amended from the preliminary draft. The original description in the preliminary draft was: “...insofar as the disclosure of data or facts is not of such nature that it would cause serious harm to the company, the shareholders or the staff of the company”. This was not stopped. As the text now states, the company will always be able to hide behind any possible personal interest of the company. The Minister referred to the opinion of the State Council which found that the text submitted to him did not comply with the directive. Therefore, it has also been modified.

Finally, there was an amendment by colleagues Van der Auwera, Dierick and George regarding the entry into force of this law. Instead of choosing the summer of 2011, the date of entry into force will be 1 January 2012. This amendment was adopted by 16 votes against 1 abstinence.

Finally, the entire draft law, as amended, was unanimously adopted.

Finally, I would like to say that the Trade Law Committee has allocated sufficient time for the discussion. I would like to thank all the participating colleagues and colleague De Wit for her skillful leadership, for the first time in her capacity as chairman of the committee.

I would like to thank the rapporteur for his excellent and comprehensive report. Therefore, I will not return to the measures contained in this bill.

The PS Group is pleased to observe that through the transposition of a directive, Belgium will facilitate the exercise of the right to vote, a fundamental right of a shareholder, whether large or small. The [...]

(Technical Problem – Cut of Sound)

However, it is fundamental that any shareholder of the European Union can exercise its rights in the Union and this as easily as possible. In fact, by becoming a shareholder, he acquires the right to control the operation of the company and can then contribute to a healthier and more transparent corporate governance.

For the PS group, it is therefore essential to promote as much as possible these control rights. By reading the draft, we understand that these measures, if applied by the companies concerned, primarily protect small shareholders who often find it less easy to exercise their rights. Indeed, a small shareholder of a EU country will probably have more difficulties moving to attend a general meeting, ⁇ due to lack of financial means, lack of time or because he has been warned too late to take his arrangements.

In this context, my group will support this project.

Nevertheless, let me make a few observations that have already been ⁇ in the report. We regret that this Directive has been transposed in its minimal form. Each Member State had the choice to impose additional obligations on the companies concerned or to take additional measures to facilitate the exercise by shareholders of the rights it aims at. We could have gone further.

We regret, for example, that Article 5 simply gives the choice and therefore does not impose an obligation on listed companies to mention in their statutes that their associates can participate remotely at the general meeting. The listed companies that want to continue favouring their major shareholders will therefore not put this mention in their statutes; in this case, the bill loses its meaning. Especially since listed companies are undoubtedly equipped with sufficient resources to make available the necessary equipment for remote voting.

On the other hand, we would have understood the relevance of not obliging other companies to allow this remote vote as they often have less significant financial resources.

However, we are quite confused to read that, unfortunately, we will not allow these unlisted companies to have a legal framework in the event that they would have wanted to allow this remote vote.

Despite these few remarks, we will support this project which, I repeat, facilitates the exercise of fundamental rights attached to actions. These rights, when exercised by all shareholders, promote good governance of a company.

Mr. Speaker, Mr. Secretary of State, dear colleagues, first of all, we thank Mr. Tuybens for the full report and his excellent work as a rapporteur.

Our group joins the proposed legislative amendment, which is a implementation of a European directive, with a major concern the modernization of the company law.

The new law adequately regulates the exercise of the rights of shareholders in general and of small shareholders in particular and opens opportunities for the application of new technologies. Thus, it regulates the manner of convening the general meeting and specifies the deadlines. It regulates the information that should be made available to shareholders, the right to schedule points at the general meeting, as well as to make proposals for decisions. In addition, it aims to encourage shareholders to attend the general meeting, possibly remotely, regardless of the place of residence, and provides the possibility of voting by mandate, letter or electronically.

I would like to point out that our listed companies also adhere to the Code of Corporate Governance of 2009, which was established under the presidency of Herman Daems. The code includes a set of rules and behaviors that determine how companies are managed and controlled. A good corporate governance model must find the right balance between, on the one hand, leadership, entrepreneurship and performance and, on the other hand, control and compliance with the rules. The main objective of the Code is to promote the long-term value creation of our companies. Dear colleagues, the law presented here shows an important synergy with the code of corporate governance.

The modernization that the law is supposed to bring about should give our listed companies a more sexy and attractive character and attract an international audience and small shareholders. In this way, the threshold for participation in the general meeting is reduced. In addition, it is also a customer-friendly law. In addition, the introduction of new technologies is conducted in a mobility-friendly manner.

In addition to the call for the general meeting in the Belgian Staatsblad, we would also like to see an addition, namely the clarification of the media and media carriers, which can be expected to promote an effective dissemination to the public throughout the European Economic Area. Our proposal was to include some of such media carriers by royal decree.

We also considered that, given the international context, it was desirable to indicate in the call in which languages the communication, including the reports, the presentations and the annual reports and the like, is available to shareholders. None of the two proposals have succeeded, although we know that some of our listed companies already make the reports and annual reports in multiple languages.

Mr. Secretary of State, I also have a few comments. I would also like to refer here to the law of 2 June 2010 relating to the extension of the recovery measures of financial institutions. That law gives the government very extensive powers to intervene in the structure of financial institutions.

We acknowledge the necessity of the law, but we must yet again keep it against the light, within the framework of the law presented here. Finally, such an intervention has led to the most tumultuous shareholder meeting we have ever seen. As you know, it is a bank that is now in French hands.

I would also like to point out the problem of the shareholders of the National Bank. The National Bank is 50% owned by private shareholders. Now that the National Bank must exercise part of the supervision of the financial sector in the framework of the twinpeaks model, there are more than ever discrepancies between, on the one hand, the institutional shareholders and, on the other, the private shareholders. In fact, the situation is a little contrary to the spirit and purpose of the law. Our party therefore calls for an end to that unique in Europe aberration, so that our regulators can continue to participate without shame in the decision-making on the Basel Agreements.

We believe that the new law shows our companies in a transparent way in the European and international markets, which can only be a competitive advantage. The threshold for participation in the general meeting of our listed companies is therefore ⁇ low here. In many listed companies, employees and stakeholders are already represented in the general assembly and they make interventions based on the simple subscription of a share. This is an objective and correct criterion. The general meeting of shareholders should therefore, in our view, be exclusively a meeting of shareholders.

We are also happy to join the proposal to bring the law into force on 1 January 2012 and will then approve it with great conviction.

Bedankt, mijnheer Uyttersprot, en proficiat met uw første toespraak. (The Applause)

I would also like to thank Mr. President. Thubbens for his comprehensive report. I will just give you a few reflections.

This bill is part of the implementation of a directive imposed by Europe. The listed companies are essentially companies in which the shareholding is extremely volatile, terribly bursting and moving. Obviously, in most anonymous companies, but also in those listed on the stock market, internal democracy is all relative. Often, it is the managers who have the hand on the boards and the latter on the general assembly, whereas the opposite would want the general assembly to control the boards and the managers themselves.

The financial crisis has sufficiently demonstrated the problems of governance within large corporations. By voting on the text submitted to us, we have the opportunity to give meaning to a new form of remote general assembly. In some way, it is no longer necessary to be present to participate and distance voting will be allowed. The bill reserves this provision for listed companies, but nothing prevents this example from being used in other forms of companies, including those not listed on the stock market. This is a bet on a new way of functioning of the general assemblies of these companies.

During the debates, I highlighted a delicate point, that of the conflict of interests: the fact of refusing to answer certain questions for conflicts of interest that the society itself would consider contrary to its own interests. Personally, I thought that if the facts were of a nature to seriously harm the interests of the company, one could understand the approach, but it should not be that, behind this possibility, the companies refuse to communicate, which is of strategic importance for shareholders.

The CDH will vote in favour of these bills. They represent a step forward towards a new form of remote democracy within societies. Hopefully they will be the guarantee of better governance for some of them!

Mrs Dierick, you have the word.

Mr. Speaker, I have no presentation.

Mr. Speaker, I would like to take the opportunity to comment on what Mr. Uyttersprot has said, who, as a representative of the N-VA group in the committee, has included a number of commitments.

Mr. Uyttersprot, you talked about the fact that a shareholder assembly is exclusively for shareholders. The listed companies today prepare an annual financial report that is effectively submitted to the shareholders for voting. I note that a listed company prepares a corporate governance report describing, among other things, how the board of directors and the general meeting function. This will also be presented to the annual meeting.

I also note that most otherwise all listed companies today make a report on sustainable and socially responsible enterprises in which they report, whether or not covered with many photos, on the environmental efforts, the social efforts and other broad societal efforts they deliver. What you now say is that this really should not have a forum.

The forum for organizing and discussing this is, in my opinion, the annual meeting of shareholders. You say it yourself: one can buy a share, come to the general assembly and talk. At that time, however, the interest associations are not recognized in their role. One does not recognize that there are stakeholders, one does not recognize that there are environmental associations and social organizations that can spread criticism or give positive comments about that company.

You say that there is a business council. That is true, but there is only the management, not the shareholders. You may be able to organize another board, but then one goes only to the operational directors, the executive, not to the shareholders. It would witness maturity at the head of an undertaking if it invited representatives with an advisory voice of such organisations as consumer organisations, environmental associations and social organisations. Consultative voting means that they have the right to speak, but of course not the right to vote.

I understood from Mr. Uyttersprot that he chose to organize, for example, an open business council, to which not only representatives of trade unions would be invited, but for example also of consumers and environmental organisations. The problem remains that there are only executive directors, not shareholders. Alternatively, you thought of organizing a consultation moment, before or after the general meeting of shareholders. I hope we can at least find each other in that, colleague Uyttersprot.

If the entrepreneurial world could agree on this, that could possibly be a first step. At the same time, I continue to repeat that I would find it better or more mature if the company chose to give representatives of stakeholders the right to speak at a general meeting. Let us continue to work together in the coming weeks and months. I thank you for this initiative.

The General Meeting of the Board of Directors is preceded by a thorough discussion and preparation. As you know, an annual report of a listed company consists of a financial report, a social report, an environmental report and an element of corporate governance. Our companies, our listed companies, adhere to the Corporate Governance Code of 2009, which incorporates those elements.

As you know – you have already cited a few examples – some of our listed companies themselves already invite stakeholders on a voluntary basis. I would like to see with you, together with a number of listed companies, to what extent this can be organized in a non-binding manner.