The Shareholder Rights Directive, amended by the Directive (EU) 2017/828, establishes requirements in relation to the exercise of certain shareholder rights attached to EU-listed companies. It also establishes specific requirements in order to encourage shareholder engagement, in particular in the long term.
The Shareholder Rights Directive 2007 replaced the First Company Law Directive 68/151/EEC. It set out minimum requirements relating to the holding of meetings in the EU. The directive was amended and largely extended by Directive 2017/828/EU of 17 May 2017, also known as SRD II,[1] as regards the encouragement of long-term shareholder engagement.
The directive's structure is as follows:
Under SRD II, companies must develop and publish a policy stating how voting rights operate and how shareholders are engaged in the running of the company. The principle known as "comply or explain" operates, i.e. companies are not obliged to adhere to this requirement but if they choose not to do so they must explain why.[2]