I. – INTRODUCTION
The proposal submitted by the CNMV experts (the Spanish government agency responsible for the financial regulation of the securities markets in Spain) and the Ministry of Economy and Competitiveness run by Luis de Guindos, can be revolutionary in the world of listed companies if finally becomes law. This reform hinges on three essential points developed below.
II . – REFORM PROPOSALS
The reforms are aimed at giving more authority to minority shareholders that nowadays play a subordinate role at shareholder meetings being unable to exercise real power. In this sense the following proposals have been made:
A. Notice of Meeting of Shareholders
At present, the capital required to request the calling of board is set at 5% and the proposed reform would alter this requirement by decreasing the fixed capital to 3%. The aim of the commission is to provide minority shareholders with some input so that with the limit of 3% they can also introduce addendums to agenda, require the appointment of an independent expert in non-monetary contributions, exercise civil liability actions against directors, challenge decisions of the board and appoint auditors in certain circumstances.
B. Attendance at Board Meeting
The reform also aims to limit the number of shares that may be a statutory requirement to attend the general meeting, setting it at a maximum of 1,000, compared to 1 per thousand of capital regulations that has been required so far. Nevertheless, it has to be borne in mind that in some companies 1,000 shares can be a real disbursement in accordance with the quoted prices of some of them. At the moment a total of 17 IBEX 35 companies have established a minimum number of shares as a requirement to attend a shareholders meeting.
C. Challenging of shareholders’ meetings’ resolutions
Following the Italian model, the commission has established the percentage of capital from which it is possible to challenge decisions of the board at 0.1% compared to the current 1% in the case of listed companies, and 1% compared to the current 5% in the case of unlisted companies.
III . – CONCLUSION
The measures detailed above seek to recover the shareholders’ significance in corporations by allowing them, despite minority positions, to exercise the rights they are entitled to. In this sense, in the case of S.A. corporations, the shareholders may request information from the company which in turn cannot refuse to provide it if it is requested by at least 25% of the shareholders, or less, if the articles of association do not establish otherwise.
Additionally, in the case of listed companies, questions may be submitted up until 5 days before the general meeting of shareholders.
Vilá Abogados
For more information, please contact:
8th of November 2013
