Shareholder rights and shareholder activism: The role of the general meeting of shareholders

Abstract

An appropriate division of power between the board of directors and shareholders of the company is quintessential for the success of the company. However, for a long period of time the monitoring powers of the shareholders were limited. Recently, both the European and the national member states’ legislators refined corporate law and allocated more (monitoring) powers in the hands of the (general meeting of) shareholders. This paper addresses in a comparative perspective the powers of the general meeting in five countries. First, the power of the shareholders that is provided through the European company law directives is briefly described. Next the national powers of (1) ordinary general meetings and (2) extra-ordinary meetings are addressed and compared. Third, the law in action is used to analyze the developments of shareholder rights and shareholder activism and to discuss whether the law and regulations provide in the appropriate shareholders rights.